KUALA LUMPUR, Feb 26 — Tenaga Nasional Bhd’s (TNB) net profit fell to RM3.40 billion in the financial year ended December 31, 2020 (FY20), from RM4.53 billion in the same period a year earlier due to lower revenue and finance income.
The national electric company said the lower finance income resulted from lower interest rates and higher finance costs involving its newly commissioned plant, Tuanku Muhriz Power Station in Negeri Sembilan.
“This was offset by the tax credit on the reinvestment allowance incentive claimed by TNB based on the Finance Act 2020 gazetted by the government on December 31, 2020,” it said in a Bursa Malaysia filing today.
Its FY20 revenue declined to RM43.98 billion from RM50.94 billion year-on-year, largely contributed by the customer of commercial and industrial segments, which were affected by the Covid-19 outbreak.
“Included in this lower sales of electricity is the Imbalance Cost Pass-Through, which was in an over-recovery position of RM3,034.5 million as compared to an under-recovery position of RM1,917.9 million during the last corresponding period,” it added.
The group recorded strong earnings in the fourth quarter of 2020 (4Q20) with net profit jumping to RM1.21 billion from RM653.30 million on the back of lower revenue at RM10.32 billion from last year’s RM12.18 billion.
TNB said higher net profit for the quarter was mainly due to higher tax credit resulting from its claim of the reinvestment allowance incentive, while revenue for the quarter was mainly affected by lower generation cost.
“This resulted in higher operating profit of RM1,455.0 million, an increase of RM105.2 million or 7.8 per cent,” it said, adding that TNB had also submitted its third regulatory period (RP3) proposal to the Energy Commission today.
The RP3 will start from January 1, 2022 to December 31, 2024.
TNB’s board of directors has approved a final single-tier dividend of 18.0 sen per ordinary share and a special single tier dividend of 40.0 sen per ordinary share for FY20 totalling approximately RM3,308.7 million based on 5.70 million paid-up share capital.
The payout translated to a dividend payout ratio of 58.5 per cent from TNB’s adjusted profit after tax and minority interests, effectively hitting the higher tier of the company’s 30 per cent to 60 per cent dividend policy consistently for the last four financial years.
“The books closure and payment dates will be announced in due course,” it said.
Meanwhile, TNB said it aspires to ensure that revenue from coal generation plants is capped at 25 per cent, and maintains its commitment to no longer invest in greenfield coal plants, with the Jimah East Power plant, which was commissioned in 2019 slated to be TNB’s last new coal plant
Currently, TNB’s renewable energy capacity stands at 3,398 megawatt (MW), including large hydros, comprising 2,732MW from domestic assets and 666MW from international assets, of which 400MW in the U.K. and the rest in Turkey (wind and hydro) and India (solar).
Moving forward, TNB foresees the pace of recovery that the group has registered in the second half of 2020 to continue into 2021, although with some challenges following the re-imposition of the movement control order.
“However, the impact would be cushioned as most economic activities remain operational. The group has taken prudent measures in terms of its operational and financial requirements to ensure it remains resilient,” it added.