Tenaga 2Q earnings dn 37% to RM630m, sees challenging year

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KUALA LUMPUR: TENAGA NASIONAL BHD’s (TNB) earnings fell 36.9% to RM630.30 million in the second quarter ended Feb 28, 2011 from RM1 billion a year ago as it was impacted by higher coal prices.

Forecasting the current financial to be challenging, TNB said on Thursday, April 21 that its revenue was a marginal 1.5% higher at RM7.503 billion from RM7.389 billion a year ago.

Its earnings per share were 14.2 sen compared with 23.05 sen while it declared a lower dividend of 4.5 sen per share.

The power giant said the improvement was mainly from sales of electricity in Peninsular Malaysia and Sabah Electricity Sdn Bhd (SESB) which recorded an increase of 2.4% and 5.2% respectively.

The units also registered a growth of 2.0% in the peninsula and 4.7% in SESB on-year.

“There was a significant decrease in earnings of 36.9% contributed by higher generation costs from utilisation of coal where the average contracted coal price consumed was US$103.8 per tonne as compared to US$80.7 per tonne a year ago.

“Operationally, it said that TNB is now facing a very challenging period with the rising coal prices, insufficient gas supply and comparatively more expensive alternative fuels,” it said.

TNB said coal prices had surpassed US$120 per tonne and the price was expected to increase further due to the current global situation.

It said the higher costs were inevitable due to the deferment of the fuel cost pass-through mechanism.

“Given the foregoing scenario, the board of directors expects the group’s prospects for the year ending Aug 31, 2011 to be very challenging and that the financial results for the full finance year to e lower compared to the previous year,” it said.