Tenaga sure of profit this year despite Q3 loss

Tenaga Nasional Bhd (TNB) is confident of turning in a profit for the financial year ending Aug 31, 2011, despite the RM440.2 million net loss posted in the third quarter.

However, the utility giant would not surpass last year's performance, said President cum Chief Executive Officer, Datuk Seri Che Khalib Mohd Noh.

"We are quite confident of making profit for the whole year, but to say we will be repeating the result of last year, definitely not," he told reporters after TNB's Corporate Integrity Pledge launching ceremony here, today.

TNB's net profit before foreign exchange translation gain for its financial year ended Aug 31, 2010, had been up 22.6 per cent at RM2.6 billion while revenue had increased to RM30.32 billion.

For the current year, he said if it wasn't for the additional cost of RM1.3 billion incurred in the third quarter due to the rising fuel cost, the company would have performed better.

"What happened during the third quarter is exceptional because we had acute or severe gas shortage which caused us to procure alternative fuel.

"That dragged TNB's third quarter result. Without the additional cost, we should be making profits, in fact about RM400 million to RM500 million," Che Khalib explained.

On how it planned to weather further increase in coal price, he said further coal price rise would still be manageable, moreover the strengthening of ringgit would help the company to mitigate the cost increases.

"Looking at the third quarter result, even with the high coal price, we still absorbed the additional. "Yes, the coal price is still on the rise, but it is still manageable," he
added.

As for the outlook for 2012, Che Khalib said it would be better than the performance of the current financial year. However, it is still not expected to repeat the growth seen in 2010, he said.

He said the two per cent base tariff revision in June this year would be the only benefit that would partially cushion the increase in coal price. -- Bernama