Tenaga Nasional Bhd (TNB) has posted a 1.3% increase in pre-tax profit to RM798.2mil for its first quarter ended Nov 30, 2002, from a year earlier, and is looking at ways to increase shareholders' funds and smoothen the foreign exchange impact on earnings.
“We are on track to chart a satisfactory performance going into the future,'' TNB chairman Datuk Awang Adek Hussin said at his first media briefing on the company's financial results in Kuala Lumpur yesterday.
The national power company registered a 6% jump in revenue to RM4.06bil and a 0.8% rise in operating profit to RM787.2mil for the first quarter compared with the previous corresponding period.
Net profit rose nearly 10% to RM663.2mil from RM604mil previously and earnings per share increased to 21.3 sen from 19.4 sen.
TNB recorded a forex translation gain of RM299.2mil for the quarter under review compared with RM261.5mil a year earlier. The group's rationalisation scheme of converting subsidiaries into divisions had a positive tax impact.
The group has started conforming to accounting standard MASB 25 with its latest financial disclosure. Awang Adek said the impact dealt mainly with deferred taxation and had no impact on the group's cashflow. TNB's gearing level, however, had increased to 2.06 times from 1.6 times because of MASB 25.
The group has backdated the impact of adopting MASB 25 to its previous financial year.
“We are considering proposals to lower our gearing and strengthen our shareholders' funds,'' said Awang Adek.
He said a proposed RM200mil convertible bond issue, which was awaiting approval from the authorities, was one way the group would raise its shareholders' funds.
Apart from reducing its gearing, Awang Adek said TNB was exploring ways to smoothen the impact of forex translations on its profitability.
“We are thinking of minimising the impact of forex on our balance sheet so that we can focus on operations instead of our results. The only source of variation is the yen,'' he said.
One way to address the issue, he said, was to hedge TNB's yen-denominated loans but that would be tempered by the cost of maintaining the hedge. Yen-denominated loans account for 19% of TNB's RM30.6bil debt.
Awang Adek reiterated that TNB was expecting demand for electricity in the country to grow by 6% during its current financial year. “Under normal circumstances, it is no problem,'' he said.
Consumption of electricity by the industrial sector rose by 6.5% during TNB's first quarter to Nov 30, 2002. Electricity demand by the commercial and residential sectors jumped 8.1% and 6.9% respectively from a year earlier.
“This means the economy is doing well,'' he said, adding that a higher percentage of TNB's plants were operational during the first quarter and that the reliability of transmission and supply had improved.
Awang Adek said TNB, which had been linked with a consortium eyeing a stake in Australia’s Loy Yang power station, had no plan of buying a stake.
“One can always invite us to join but we have not considered (the invitation). We want to focus on what we have now,'' he said.
Genting Bhd told the KLSE yesterday that its wholly-owned subsidiary, Sorona Ltd, was looking at acquiring a stake in the Loy Yang power station in the Australian state of Victoria.
And Sime Darby Bhd had earlier said it was undertaking preliminary investigations into the possible acquisition of a stake in Loy Yang Power Ltd, which owns and operates a 2000MW power station.
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