Tenaga Nasional Bhd (TNB) logo is seen on the signage at its power station in Malacca at sunset. (Pix taken by M. Hafidz Mahpar for Star Online)
KUALA LUMPUR: Tenaga Nasional Bhd
(TNB) has revised its dividend policy, first introduced in 2007, in order to maintain an efficient capital structure while providing sustainable dividends.
The utility giant told Bursa Malaysia on Friday that it intended to distribute dividends on a 30% to 50% dividend payout ratio, based on the reported consolidated net profit attributable to shareholders after minority interest, excluding extraordinary, non-recurring items.
In April 2007, TNB had announced its first dividend policy (and the only one so far) with the plan to distribute between 40% and 60% of its annual free cash flow (cash flow from operations minus capital expenditures) to shareholders as dividends.
In its latest announcement, the company said it sought to adopt a dividend policy that provided stable and sustainable dividends to shareholders.
“This is while maintaining an efficient capital structure, sufficient to cater to its business prospects, capital requirements growth/expansion strategy and other factors considered relevant by the board,” it added.
TNB said its ability to pay dividends also depended on dividends received from its subsidiaries, which in turn would depend on the subsidiaries’ distributable profits, operating results, financial conditions, capital expenditure plans and other factors that the board considered relevant.
While the dividend policy reflects the board’s current views on the group’s financial and cash flow positions, TNB said, the dividend policy would be reviewed from time to time in light of its financial position, the regulatory environment and its business prospects.
According to TNB, it is the board’s policy, in recommending dividends, to allow shareholders to participate in the company’s profits, as well as retain adequate reserves for future growth.
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