KUALA LUMPUR (Feb 28): Tenaga Nasional Bhd, which turned to profit of RM653.3 million in the fourth quarter ended Dec 31, 2019 (4QFY19), declared a final dividend of 20 sen per share and a special dividend of 50 sen per share. This brings the total to RM1 per share for the financial year ended Dec 31, 2019 (FY19), compared with 53.27 sen for FY18.

In a filing today, TNB said its 4QFY19 earnings were mainly boosted by a one-off gain of RM598.9 million. Furthermore, it is worth noting that the net loss of RM134.3 million in the previous corresponding quarter was pulled down by a one-off impairment of RM304.7 million. 

Foreign exchange gains, partially offset by higher finance costs, also helped to lift the utility group’s quarterly earnings, according to the company’s filing.

Quarterly earnings per share stood at 11.49 sen from 2.37 sen losses per share in 4QFY18.

The better net profit in the quarter was despite a 3.42% drop in revenue to RM12.18 billion, from RM12.55 billion, no thanks to lower electricity sales.

The higher bottom line for 4QFY19 helped TNB stage an over 20% jump in net profit for the financial year ended Dec 31, 2019 (FY19) to RM4.53 billion or 79.64 sen per share, from RM3.72 billion or 65.62 sen per share.

TNB said the better FY19 was on the back of lower impairment, coupled with forex gains as opposed to losses in FY18.

“During the fourth quarter of the period under review, the group experienced prolonged forced outages of coal plants, namely TNB Janamanjung (TNBJ) and Kapar Energy Ventures (KEV), which impacted the earnings of the group.

“As for the regulated business, the company is able to maintain the approved return on the regulated business under the Incentive Based Regulation (IBR) framework of RM3.84 billion,” the company said.

For the full financial year ended Dec 31, 2019 (FY19), the utility group’s revenue was flattish at RM50.94 billion compared with RM50.39 billion in FY18, thanks to higher sales of electricity in the period under review.

Amir hails ‘reasonable’ FY19 performance

In a separate statement, TNB president and group chief executive officer Datuk Seri Amir Hamzah described TNB’s FY19 as “reasonable” amid operational challenges faced by its generation business in the final quarter.

On TNB’s international business, Amir said the turnaround exercise of assets in Turkey and India has led to a return of profitable contribution from the associates.

As for TNB’s UK investments, Amir expressed confidence of continuous encouraging performance, exceeding earlier expectations. “We foresee some potential upside in 2020 due to technology enhancement initiatives that we are currently undertaking.”

Touching on the recently announced economic stimulus package by interim prime minister Tun Dr Mahathir Mohamad, Amir Hamzah commented that the electricity industry’s contribution through a six-month 15% discount for sectors severely affected by the Covid-19 outbreak will be fully funded through the Electricity Industry Fund or Kumpulan Wang Industri Elektrik (KWIE).

“In addition, TNB will invest RM13 billion this year to augment the electricity industry.

“This includes RM11 billion capex investments as planned in 2020, and an accelerated implementation of some high-value projects of around RM2 billion, which includes projects such as LED street lights, transmission and distribution network projects and rooftop solar installations,” he added.

TNB shares fell 40 sen or 3.2% to close at its eight-month low of RM12.10, giving it a market capitalisation of RM68.81 billion.