KUALA LUMPUR (Dec 14): Tenaga Nasional Bhd (TNB) said today the weakening ringgit is unlikely to have material impact on its earnings in the current financial year ending Aug 31, 2016 (FY16) as its US dollar denominated borrowings will only be matured in 2025.

Despite noting the group recorded unrealised foreign exchange (forex) losses amounting to RM800 million in its fourth quarter ended Aug 31, 2015 (4QFY15), TNB chief financial officer Fazlur Rahman Zainuddin described that as unrealised losses and as not a major problem to the group's financial status.

"Forex will not have much impact to our bottom line. Although US dollar denominated borrowings accounted for 7% of our total borrowings, it only matured in 2025," he told reporters after TNB's annual general meeting here.

Nevertheless, Fazlur said the weaker ringgit may have some adverse impact on raw material cost, such as coal and liquefied natural gas, which are the main components used in power generation.

He was unable to specify the how the impact is.

He elaborated the actual generation cost is dependent on how much energy is being consumed.

"When we use less energy, the generation cost will be lower," he added.

Commenting on the group's capital expenditure (capex), he said the capex for FY16 will be slightly lower compared to RM10.8 billion in FY15.

Without specifying the exact amount for FY16's capex, Fazrul said the group will still allocate RM6 billion for upgrading transmission facilities.

"But the one-off capex will be lower this year," he added.

In FY15, TNB's net profit dropped 5.4% to RM6.12 billion versus RM6.47 billion recorded in FY14, driven by a higher foreign translation loss.

Revenue increased 1.2% to RM43.29 billion from the RM42.79 billion recorded last year.

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