Tenaga Q3 profit soars on forex gains

By IZWAN IDRIS (The Star Online)


KUALA LUMPUR: Tenaga Nasional Bhd’s net profit more than tripled in the third quarter versus a year earlier, boosted by foreign exchange (forex) gains and a recovery in domestic electricity demand.

For the quarter ended May 31, TNB made a net profit of RM1.023bil, or 23.6 sen per share, against RM298.8mil, or 6.9 sen per share, in the year-earlier period.

Turnover improved to RM7bil from RM6bil before.

Stripping out the forex gains of RM603mil, TNB’s net profit stood at RM419.9mil.

President and chief executive officer Datuk Seri Che Khalib Mohamad Noh expects the utility firm would probably incur forex translation losses in the final quarter, due to the weaker ringgit trend since June.

A large chunk of TNB’s foreign debt is denominated in US dollar and Japanese yen. The ringgit was stronger against the two currencies in the three months ended May 31, but has since weakened.

Electricity demand in the country had been rising since March. TNB’s press handouts showed a new peak demand level was achieved on June 17 at 14,029 megawatts.

The company’s weekly generation data also showed energy consumption pattern in June and July “to have exceeded the levels achieved last year.’’

“We expect electricity demand to continue to improve in the last quarter,’’ Che Khalib told reporters at the group’s results briefing yesterday.

However, full-year demand was expected to show a slight drop at less than 2% compared with the previous year, dragged down by the steep plunge in usage registered in the January/February period.

Domestic electricity charges were lowered effective March 1 this year.

TNB shares closed unchanged at RM8.40 yesterday, ahead of the results announcement and a Cabinet decision on electricity tariffs. The rates were kept at current levels.

The market had been anticipating a tariff hike, although none had expected an adjustment to happen within TNB’s current financial year ending Aug 31.

“We take it as it is,’’ Che Khalib said when asked to comment on the power tariff adjustment, reiterating the stand that TNB would adjust the rates charged on consumers only if there was a review of the price of gas used to generate electricity.

TNB used 2.9 million tonnes of coal to generate electricity in the third quarter, higher than two million tonnes used in the second quarter. The increased usage of the more expensive coal was due to what TNB termed “gas curtailment,” or disruption in gas supply to its power plants.

This contributed to the decline in TNB’s operating margins in the third quarter.

Che Khalib said TNB would probably miss its target to keep the average coal price at US$85 a tonne this year, as prices had risen in the last quarter. TNB paid an average US$79.90 a tonne for coal in the third quarter, down from US$85 in the second quarter and US$113 a tonne in the first.

Electricity tariff will go up only if gas price rises

Sources: The Star Online

KUALA LUMPUR: The electricity tariff increase will only be implemented if the gas price is raised by the Government, Tenaga Nasional Bhd (TNB) president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said on Saturday.

He said the tariff increase was intended to cover higher operating costs as a result of the rise in fuel prices.

“For TNB, when the gas price goes up, we need to make adjustments to the tariffs,” he told reporters at the TNB Family Day gathering at headquarters level here.

Khalib said that when fuel prices came down, the electricity tariffs were also adjusted accordingly.

“The gas price is determined by the Government and if it is raised, then we need to adjust our tariffs to take that into account,” he said when asked about the possiblity of a tariff increase if the gas price is raised.

Energy, Green Technology and Water Minister Datuk Peter Chin Fah Kui said recently that the National Economic Advisory Council has made a decision on the revision of electricity tariffs in line with the fuel price movements.

He said that any electricity tariff increase would not affect the lower income group as the Government had reduced the rates by an average 3.7% to 31.31 sen per kilowatt hour from 32.5 sen, effective March 1, 2009.

Khalib said the current fuel prices were higher when compared to that at the beginning of this year. — Bernama

“The decision to look into the gas price, whether to increase or not, is up to the Government. The gas price in Malaysia is not the market price,” he said, adding that with the various subsidies given, the gas price was much lower than the market price.

“If we are to pay the market price, then the gas price and electricity tariffs will be much higher than what we are enjoying now,” he added.

On the Bakun hydroelectric power project, Che Khalib said companies interested to participate in undersea cable portion could submit their tenders early next year.

“Those who qualify or are capable can tender for it early next year under the open tender process,” he said, adding that the process to evaluate the tenders usually requires about six months.

The transmission cable and undersea cable project is reported to be worth between RM8bil and RM10bil, involving a 730km high-voltage direct transmission line and 670km undersea cable for the Bakun dam.