TNB net profit up 26% in second quarter

Group will take prudent measures to remain resilient

KUALA LUMPUR: Tenaga Nasional Bhd’s (TNB) net profit for its second quarter ended June 30, 2021 rose 26% to RM821.50mil from RM653.30mil in the previous corresponding period, mainly due to higher operating profit.

In a filing with Bursa Malaysia yesterday, TNB said the higher net profit was also due to a significant reduction in foreign currency translation loss of RM215.8mil.

Additionally, it said net profit was boosted by an accounting gain on fair value of the financial instruments of RM87.8mil, compared with a loss of RM49.1mil reported a year ago. This was offset by higher finance costs and tax provisions, it added.

“As for the regulated business, the group is able to maintain the approved return on the regulated business under the incentive based regulation framework of RM2.3bil,” it said.

Meanwhile, revenue for the second quarter increased to RM12.44bil from RM10.89bil a year earlier.

TNB said this was mainly due to higher sales of electricity of RM1.3bil, up 5.9% from RM22.16bil a year ago with sales growth of 4.9%.

“The increase in units sold for TNB was largely contributed by the industrial sector, as the businesses have gradually recovered from the prolonged pandemic since it first hit the country in March 2020.

“The prolonged pandemic affected customers’ payment behaviour as the collection trend deteriorated and became more challenging to recover.

“Hence, higher net loss on impairment of financial instruments of RM667.6mil was recognised during the current period,” it said.

TNB added that the resultant operating profit was a net increase of RM405.1mil, or 10%, to RM4.45bil from RM4.05bil in the previous corresponding period.

For the six-month period ended June 30, 2021, TNB’s net profit grew to RM1.78bil from RM1.37bil in the previous corresponding period, while revenue climbed to RM23.92bil from RM22.55bil a year earlier.

Additionally, TNB said the Malaysian economy performed better in the second quarter of this year by recording a growth of 16.1%, compared with negative 0.5% in the first quarter.

It said the growth was mainly driven by the improvement in domestic demand and continued robust exports performance.

“This is consistent with the demand growth recorded by TNB of 4.4% for the first half of the year where recovery was registered in the industrial sector.”

Amid the developments surrounding the pandemic, TNB said it would continue to take prudent measures in terms of operational and financial requirements to ensure it remains resilient.