Highlight Tenaga Nasional’s 4Q net profit plunges 39.5% on forex loss

by **Cals** Fri 30 Oct 2015, 03:07

Highlight

[size=28]Tenaga Nasional’s 4Q net profit plunges 39.5% on forex loss

By Meena Lakshana / theedgemarkets.com | October 29, 2015 : 6:48 PM MYT

KUALA LUMPUR (Oct 29): Tenaga Nasional Bhd (TNB) ([You must be registered and logged in to see this image.] Valuation: 1.20, Fundamental: 1.30) saw its fourth quarter net profit plunge 39.5% due to ringgit depreciation, which resulted in foreign exchange (forex) translation loss.

Net profit fell to RM820.9 million or 14.55 sen per share for the fourth quarter ended Aug 31, 2015 (4QFY15) from RM1.36 billion or 24.03 sen per share in 4QFY14.

Revenue for 4QFY15 grew marginally to RM11.74 billion compared with RM11.72 billion in 4QFY14.

This was despite TNB recording higher sales of electricity of RM11.31 billion in 4QFY15, from RM11.2 billion in 4QFY14.

In a filing with Bursa Malaysia today, the group said the increase was mainly from sales of electricity in Peninsular Malaysia and Sabah, which recorded an increase of 1.9% and 4.3% respectively.

Nonetheless, TNB is proposing a final dividend of 19 sen per share for the financial year ended Aug 31, 2015 (FY15), which is subject to the approval of its shareholders at the forthcoming annual general meeting.

Meanwhile, the weak 4QFY15 earnings dragged down the group's net profit for the 12-month period (FY15), which fell 5.4% to RM6.12 billion or 108.41 sen per share from RM6.47 billion or 114.59 sen per share in FY14.

TNB noted that it recorded a translation loss of RM819.3 million in FY15 compared with a gain of RM445.3 million in FY14 due to the strengthening of the US dollar and the yen against the ringgit.

Revenue for FY15, however, rose 1.16% to RM43.29 billion from RM42.79 billion in FY14.

In a separate statement today, TNB said FY15 revenue had taken into consideration the imbalance costs pass-through over-recovery amount of RM1.9 billion for the period from Jan 1, 2014 to Aug 31, 2015.

The group also saw an 8.1% increase in sales of electricity to RM43.46 billion in FY15 from RM40.22 billion in FY14, mainly from sales of electricity in the peninsula and Sabah, which recorded an increase of 8.4% and 9% respectively.

Higher average electricity tariff in the peninsula of 14.9% and Sabah of 16.9%, effective Jan 1, 2014, also helped to boost sales of electricity.

For FY16, TNB said electricity demand growth is expected to increase in tandem with the country's projected economic growth of between 4% and 5%, mainly from expansion in the construction, services and manufacturing sectors.

"Given the impact of the slowdown in the global economy, including declining commodity prices, depreciation of the ringgit and expected slower growth in major advanced economies, the board continues to remain cautious on the group's prospect for FY16," it added.

TNB shares closed eight sen or 0.63% lower at RM12.66 today, with a market capitalisation of RM71.67 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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