Highlight Tenaga 1Q net profit rises 22% y-o-y to RM1.73b

by **Cals** Thu 23 Jan 2014, 18:40

Highlight Tenaga 1Q net profit rises 22% y-o-y to RM1.73b

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Thursday, 23 January 2014 18:06

KUALA LUMPUR (Jan 23): State-controlled utility Tenaga Nasional Bhd reported a 22% rise in first quarter net profit from a year earlier on higher electricity sales and lower taxes.

In a statement to the exchange today, Tenaga said net profit rose to RM1.73 billion in the first quarter ended November 30, 2013 (1QFY14) from RM1.42 billion. Revenue increased to RM9.59 billion from RM9.13 billion.

Tenaga said revenue had increased as electricty sales rose 3.3% and 1.6% respectively in Peninsular Malaysia and Sabah. In terms of unit, power sales grew 2.6% and 1.4% respectively.

"The higher (net) profit is due to significant movement in taxation, being the result of reinvestment allowance incentive of RM201.7 million and the reversal of deferred taxation of RM188.7 million to reflect the change in the taxation rate from 25% to 24%.

"The current quarter recorded a lower translation gain of RM252.7 million as compared to RM397.4 million reported in the first quarter of
FY2013 due to the weakening of the ringgit against the Japanese yen," Tenaga said.

During the quarter, Tenaga's operating profit, however fell to RM1.52 billion from RM1.76 billion as operating expenses rose.

However tax assets amounting to RM115.9 million versus tax expenses of RM587.2 million had supported 1QFY14 net profit growth, according to notes accompanying Tenaga's financials.

Looking ahead, Tenaga said implementation of the incentive-based regulation may mitigate fuel-cost risks. As such, the company expects "better earnings predictability".

"Based on the above, the board of directors continue to view the prospects of the group for the financial year 2014 to remain positive," Tenaga said.