PETALING JAYA: Tenaga Nasional Bhd’s (TNB) share price fell 3.1% to RM14.26 yesterday, following a lacklustre set of earnings for the third quarter.
It was the second biggest loser on Bursa Malaysia with 10.2 million shares traded.
Analysts have revised earnings forecast for TNB to account for the higher effective tax rate, higher-than-expected associate losses as well as partial non-pass-through of higher fuel costs.
RHB Research is revising TNB’s financial year 2018 (FY18) to FY20 earnings by 6.5% to 14%, while Kenanga Research is cutting TNB’s FY18 to FY19 estimates by 16% to 8%.
TNB’s 60% lower net profit at RM501mil during the third quarter compared to the preceding quarter was mainly due to the recognition of an additional RM290mil impairment for its 30%-owned Turkish associate Gama Enerji Anonim Sirketi (GEAS).
The impairment was in line with the depreciation of the Turkish lira against ringgit.
On a year-to-date basis, TNB has fully provided for impairments totalled at RM500mil for GEAS.
However, MIDF Research in its research report said the underlying fundamentals in the Turkey power sector is intact with decreasing reserve margins, which bodes well for merchant market pricing and consumption that is outgrowing new capacity additions.
“GEAS has been posting positive earnings before interest, tax, depreciation and amortisation in at least the past five quarters,” said MIDF Research.
Meanwhile, Kenanga Research opined that the high fuel cost is not a matter of concern, as it is transferable under the Imbalance Cost Pass-Through (ICPT) framework to end users.
“As such, we are not worried with the sequential weaker earnings which were largely affected by higher fuel costs, as it will be matched in future by ICPT under-recovery at its topline level.”
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