KUALA LUMPUR (Aug 26): Tenaga Nasional Bhd (TNB)’s net profit for the second quarter ended June 30, 2021 rose 25.75% to RM821.5 million, from RM653.3 million a year ago, due to higher operating profit.

Its quarterly revenue also grew 14.23% to RM12.44 billion from RM10.89 billion a year ago, mainly due to higher sales of electricity arising from higher consumption from commercial and industrial customers, as certain businesses were allowed to operate during the period, instead of having to stop under the full economic closure caused by the movement control order (MCO) in the last corresponding quarter, it said in a bourse filing.

Earnings per share rose to 14.39 sen from 11.48 sen a year ago.

Meanwhile, profit after tax rose 25.7% to RM850 million from RM676 million a year ago on higher operating profit, which offset the larger net loss on impairment of financial instruments recognised in the current quarter, it said.

The group has approved an interim single tier dividend of 22 sen per share for the financial year ending Dec 31, 2021.

For the half year ended June 30, 2021, the group’s net profit increased by 29.83% to RM1.78 billion, from RM1.37 billion a year earlier, while its revenue rose 6.09% to RM23.92 billion from RM22.55 billion.

Earnings per share rose to 31.18 sen from 24.10 sen.

Amid the developments surrounding the pandemic, the group said it will continue to take prudent measures in terms of its operational and financial requirements to ensure it remains resilient.

The group noted that the Malaysian economy performed better in the second quarter of the year, recording a growth of 16.1% compared to negative 0.5% in the first quarter.

“The growth was mainly driven by the improvement in domestic demand and continued robust exports performance. This is consistent with the demand growth recorded by TNB of 4.4% for the first half of the year, where recovery was registered in the industrial sector,” it said.

However, the group noted that towards the end of the second quarter, there was a slowdown in the economy resulting from the reimposition of stricter containment measures nationwide due to the resurgence of Covid-19 cases.

This had resulted in Bank Negara Malaysia revising the country's economic growth projection to between 3.0% and 4.0% for 2021, from between 6.0% and 7.5% as previously projected.

In a separate statement, TNB president and chief executive officer Datuk Baharin Din revealed the group’s sustainability pathway with an aim of achieving net zero emissions by 2050.

“This new pathway is a clearer manifestation of TNB’s sustainability journey, which began in 2016 with the launch of the reimagining TNB sustainability path over the next 30 years,” he said.

The goal will be supported by a commitment to reduce 35% of its emissions intensity, as well as 50% of its coal generation capacity by 2035, while its revenue from coal generation plants contribute no more than 25% of its total revenue.

“Leading up to the 2035 commitment, we will continue to improve efficiency at our existing thermal plants, and build up scale in our renewable generation portfolio. Our target is to achieve 8,300MW of renewable energy by 2025.

“We believe that an inflection point between 2035 and 2040 will determine the speed of our net zero trajectory. Hence, building up towards that point, TNB is dedicated to develop energy storage solutions and is already in discussions with the Government to implement this as an enabler for RE growth. TNB is also committed to accelerate investments in emerging green technologies like green hydrogen, and carbon capture and utilisation (CCU) – as soon as it becomes economically viable,” he added.

TNB closed 2 sen or 0.19% higher at RM10.30 today, valuing the group at RM57.09 billion.