KUALA LUMPUR: Tenaga Nasional Bhd’s (TNB) net profit declined 5.7 per cent to RM6.1 billion for the full-year ended August this year compared with RM6.4 billion in the corresponding period a year ago due to the ringgit’s depreciation.
TNB said the lower net profit was due to foreign exchange translation losses of RM819.3 million compared with RM455.3 million recorded in the same period last year.
Its net profit for the fourth individual quarter dropped 39.5 per cent to RM821 million quarter-on-quarter from RM1.35 billion a year ago.
The group’s performance saw a rise in revenue of 1.2 per cent to RM43.3 billion for the current year compared with RM42.8 billion for the same period last year.
President and chief executive officer Datuk Seri Azman Mohd said this year’s performance illustrated the effectiveness of Incentive Based Regulation (IBR) framework in providing earnings stability and visibility to TNB.
“The IBR framework provides a fair level of return for TNB to operate efficiently while the Imbalance Costs Pass-Through (ICPT) implementation ensures TNB’s neutral exposure to fluctuations in generation costs.
“It also benefited the consumers directly, whereby savings from the lower generation costs that resulted from reduction in commodity prices have been passed back to consumers in tariff rebates from March this year until presently,” he said in a statement yesterday.
However, Azman said TNB continued to be impacted by the globa economic slowdown and the depreciating ringgit for the year under review.
Chairman Tan Sri Leo Moggie said TNB was aware of the challenges in the current economic landscape, but was committed to delivering sustainable, long-term earnings growth for the company.
“Any venture the group undertakes will be value-accretive to our shareholders. Throughout the process, we will ensure that the highest level of corporate governance standards is met,” he said.
TNB expects electricity demand growth to rise in tandem with the projected economic growth of between four and five per cent, mainly from expansion in the construction, services and manufacturing sectors as detailed in the 2016 Budget.
“The revenue recorded for the period under review had taken into account the ICPT over-recovery amount of RM1.9 billion for the period from January 1 last year until August 31 this year,” it said.
Operating expenses for the year ended August dropped by 2.2 per cent to RM35.5 billion from RM36.3 billion last year mainly due to lower generation costs as a result of lower liquefied natural gas (LNG) consumption as well as oil and distillate.
The utility said lower commodity prices, namely coal and LNG, also contributed to the lower generation costs.
Electricity demand for the year posted 2.2 per cent growth compared with 2.5 per cent recorded a year ago.