KUALA LUMPUR (Dec 9): Tenaga Nasional Bhd (TNB) has announced today its plan to adopt a new dividend policy to distribute dividends based on 30% to 50% dividend payout ratio, based on the reported consolidated net profit attributable to shareholders after minority interest, excluding extraordinary, non-recurring items.

In the filling to Bursa Malaysia, TNB said the revised dividend policy will take effect from financial year ending Aug 31, 2017.

“TNB endeavours to adopt a dividend policy that would provide stable and sustainable dividends to shareholders, while maintaining an efficient capital structure [that's] sufficient to cater to its business prospects, capital requirements growth/expansion strategy and other factors considered relevant by the Board,” it said.

It said TNB’s dividend payout is from dividends received from its subsidiaries, which would in turn depend on these subsidiaries’ distributable profits, operating results, financial condition, capital expenditure plans, and other factors which the respective subsidiary board deems relevant.

As the dividend policy reflects the board’s current views of the group’s financial and cash flow position, the dividend policy will be reviewed continuously, considering TNB’s financial position, regulatory environment and business prospects, it said.

It is the board’s policy to recommend dividends that allow shareholders to participate in the company’s profits, as well as to retain adequate reserves for future growth, it added.

TNB’s previous dividend policy is that dividend is paid out based on 40%-60% of its company’s annual free cash flow; cash flow from operations less normalised capital expenditure (capex) and interest servicing.

Shares of TNB closed down two sen or 0.14% at RM13.98 today, giving it a market capitalisation of RM79.02 biliion.