Tenaga Nasional Bhd (TNB) has posted a net profit of RM706mil for its fiscal 1st half to end-February, down 47% from RM1.3bil in the same period a year earlier. However, revenue came in higher at RM8bil compared with RM7.5bil previously.
The year-on-year fall in net profit was largely due to a foreign exchange loss of RM313mil in the 2nd quarter which wiped out the 1st quarter's forex gain.
TNB chairman Datuk Dr Awang Adek Hussin said, however, that the forex losses were to be expected, and maintained that even with a RM19.2mil forex loss for the 1st half, the company was more or less at break-even.
TNB's forex loss in the current financial year to date contrasts sharply with last year's gain; in the 2nd quarter of financial year 2002, TNB recorded a translation gain of RM549mil, which boosted its forex gain for the 1st half of 2002 to RM814mil. For the quarter under review, the TNB net profit amounted to RM43mil on higher revenue of RM3.9bil.
Operating profit for the 1st half was flat at RM1.4bil. However, operating expenses were 9% higher at RM6.7bil compared with RM6.2bil in the previous corresponding period. The increase in operating expenses was mainly due to a 10% hike in the cost of electricity that TNB purchased from independent power producers (IPPs) when additional plants were commissioned and came on stream in the 2nd quarter.
The IPP purchase costs account for about 39% of TNB's total operating expenses currently, but Awang said no more new plant were expected to come on stream for the rest of the year. TNB's earnings per share for the six months under review were 22.7 sen against 42.5 sen in the same period a year earlier.
The board of directors has recommended an unchanged tax-exempt dividend of 3 sen per share for the period under review.
Given Multex Estimates' consensus profit forecast of RM1.29bil for TNB for the current year, the company is more than half way to that target. For fiscal 2002, its full-year net profit had amounted to RM1.42bil.
Awang said power demand had dropped 2.9% in the latest quarter from the preceding quarter, but noted that the 2nd quarter was traditionally quieter due to the festive seasons and shorter months.
Nonetheless, power demand in the quarter under review was about 8% higher than in the corresponding period a year ago.
Describing TNB's 1st half performance as satisfactory, Awang said that so long as the Malaysian economy grew by about 4% in the 2nd half, the company should perform to expectations.
Electricity consumption by all groups had increased in the 1st half, he said, with demand in the industrial and commercial sectors up by 6% to 8%.
TNB also said electricity sales by its Liberty Power Plant in Pakistan had surpassed market expectations with a 11% jump.
According to Awang, the TNB power reserve margin is currently 32% to 35%, but would increase by the end of the current financial year.
On the long-delayed divestment of the company's 40% stake in the Kapar Power Plant to Malakoff Bhd subsidiary Kapar Energy Ventures Sdn Bhd for RM4.2bil, Awang said that as the deal was not a small thing, both sides are always making sure we are doing the right thing.