KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has estimated a recovery of about RM7bil from the imbalance cost-pass-through (ICPT) mechanism in the first half of financial year 2024 (1H24), based on the current fuel price trends.
The utility giant said in a statement the forward-looking perspective reflected TNB’s proactive stance in managing its financial outlook and controlling fuel-related expenditures.
President and chief executive officer Datuk Baharin Din said the development significantly enhances TNB’s working capital, boosting its cash flow and improving gearing levels in 2023.
“The global reduction in coal prices, combined with TNB’s proactive approach to enhancing revenue collection, has positioned the company for an improved cash flow outlook.
“This is further supported by the RM6bil government-guaranteed loan to stabilise the energy industry. These factors collectively contribute to TNB’s strengthened cash flow position and gearing level in 1H23,” he added.
During a recent analyst briefing on the group’s second-quarter financial results, Baharin said TNB’s prudent capital management enables the company to reward its shareholders with an interim dividend of 18 sen, which accounts for 49.4% of the adjusted profit after tax and minority interest.
Furthermore, improvement in ICPT receivables is underscored by the successful recovery of RM10.4bil in ICPT costs for the period of January to June 2023.
This demonstrates the government’s continued commitment to the Incentive-Based Regulation framework and ICPT mechanism for the past 18 cycles since 2015. “Moreover, the company is expected to recover RM4.7bil of ICPT costs from the government in the second half of the year,” said TNB.
Baharin said despite challenges stemming from negative fuel margins and foreign exchange volatility, TNB reported a commendable performance in this demanding environment.
In the first half to June 30, TNB reported a net profit of RM1.2bil, while revenue rose 3.8% to RM25.95bil, compared with the corresponding period in 2022.
He added that TNB’s ability to navigate through such challenging conditions and achieve notable financial milestones underscores its resilience and strategic foresight in the energy sector.