KUALA LUMPUR (Oct 26): Tenaga Nasional Bhd's (TNB) net profit slipped 2.4% in its fourth financial quarter ended Aug 31,2017 (4QFY17) to RM1.72 billion or 30.38 sen per share, from RM1.76 billion or 31.22 sen per share a year ago, mainly due to higher finance cost and taxation.

Quarterly revenue, however, rose 10.9% to RM12.46 billion in 4QFY17 from RM11.24 billion a year ago.

The national utility also proposed a final single tier dividend of 44 sen per share for its full financial year ended Aug 31, 2017 (FY17), in which the books closure and payment date are to be announced later.

For FY17, TNB reported a 6.3% drop in net profit to RM6.9 billion or RM1.22 per share from RM7.37 billion a year ago or RM1.31 per share.

In a filing with Bursa Malaysia today, the national utility attributed the lower earnings to an increase in finance cost from the new borrowings acquired during the year and the increase in deferred taxation expense due to higher capitalisation of assets.

Revenue for FY17, however, came in 6.5% higher at RM47.42 billion, from RM44.53 billion in FY16.

In a separate filing with the exchange today, TNB said it will be adopting a new dividend policy with effect from FY17.

“TNB intends to distribute dividends based on 30% to 60% dividend payout ratio based on the reported consolidated net profit attributable to shareholders after minority interest, excluding extraordinary, non-recurring items,” it said.

TNB added that its ability to pay dividends is also dependent upon the dividends received from its subsidiaries, which in turn would depend on the subsidiaries’ distributable profits, operating results, financial condition, capital expenditure plans and other factors that the respective subsidiaries' boards deem relevant.

“While the dividend policy reflects the board’s current views on the group’s financial and cash-flow positions, the dividend policy will be continuously reviewed from time to time in light of TNB’s financial position, regulatory environment and business prospects.

“It is the policy of the board, in recommending dividends, to allow shareholders to participate in the company’s profits, as well as to retain adequate reserves for future growth,” it said.

According to its FY16 annual report, TNB stated that its dividend was paid out based on 40%-60% of the annual free cash flow at company level.

On Nov 30 last year, TNB’s board approved the change of the financial year end of the group from Aug 31 to Dec 31, which shall be implemented after the close of its financial year ended Aug 31, 2017.

TNB shares closed unchanged at RM14.34 today, for a market capitalisation of RM81 billion.