PETALING JAYA: Tenaga Nasional Bhd (TNB) posted a 9.8% year-on-year decline in net profit to RM1.12bil for the second quarter of the financial year ending Dec 31,2019 (FY19), bringing its net profit for the first half of the year to RM2.67bil.
The lower net profit for the first half of FY19 was due to regulatory adjustments and finance cost arising from Malaysian Financial Reporting Standards (MFRS) 16, which impacted the results by RM112.2mil.
TNB registered a revenue of RM26.12bil for the first half of FY19 (H1FY19), mainly attributed to the increase in the group’s sales of electricity of 5.6%.
In terms of GWh, electricity sales grew by 5.1% to 61,882 GWh in H1FY19 in tandem with the 4.5% and 4.9% growth in Malaysia’s gross domestic product (GDP) in the first and second quarter of the year respectively, as well as hot weather during the period.
TNB’s investments portfolio, both domestic and international, which is reflected in the result of share of associates, showed positive contribution of RM70mil as opposed to a loss of RM92.9mil in the corresponding period last year.
TNB owns a 30% stake in Indian power company GMR Energy Ltd, 30% stake in GAMA Enerji, Turkey, as well as two renewable energy companies in the UK - Vortex Solar (50% stake) and TNB Wind Ventures (80% stake).
In a press release yesterday, TNB president/CEO Amir Hamzah Azizan said the group is beginning to see progress from the turnaround efforts after five challenging quarters in the International Division.
“This augurs well for TNB as we continue to drive transformation efforts ahead of the pending industry reforms to the Malaysian Electricity Supply industry.
“In tandem with transformation initiatives to better manage our core businesses, we are sharpening our focus on ensuring TNB’s international portfolio continues to add value to the group, ” he said.
In a move to support demand growth this year and beyond, TNB has spent a capital expenditure of RM5.46bil to date in the maintenance, modernising and upgrading the power infrastructure.
The board has approved a single-tier interim dividend of 30 sen per ordinary share for H1FY19, which translates to a dividend payout of RM1.71bil or 54.5% from the group’s adjusted profit after tax and minority interest.
This indicates that the dividend payout is on the higher tier of TNB’s dividend policy of 30% to 60%.
Ahead of the industry reforms under the Malaysia Electricity Supply Industry 2.0 (MESI 2.0)
expected to be announced soon, TNB had in July announced a corporate restructuring exercise to establish independent generation and retail business entities in anticipation of a more liberalised market.
“The restructuring is a key enabler of TNB’s five-year corporate strategy – Reimagining TNB, thatcommenced in 2016 to bring the company to its next stage of growth at the global level.
“In Malaysia, TNB will continue to work closely with the government and regulators to facilitate a gradual and managed change through the MESI 2.0 framework, taking into consideration the key interests of all stakeholders, in particular everyday consumers, ” Amir Hamzah said.