Higher deferred tax expense drags down TNB's third quarter bottom line

PETALING JAYA: Tenaga Nasional Bhd’s (TNB) net profit for the third quarter ended May 31, 2017 fell 15% to RM1.96 billion from RM2.31 billion a year ago due to higher deferred taxation expense.
In a filing with Bursa Malaysia yesterday, TNB said deferred taxation expense rose from RM22.1 million to RM400 million, from higher capitalisation of assets during FY16 and FY17, which was recognised during the quarter.
Revenue for the quarter rose 3.47% to RM12.55 billion from RM12.13 billion a year ago due to an under-recoverability of Imbalance Cost Pass-Through (ICPT) recognised during the quarter amounting to RM507.1 million, compared with RM537.6 million recognised a year ago.
For the nine months ended May 31, 2017, net profit fell 7.50% to RM5.18 billion from RM5.61 billion a year ago due to the increase in finance cost from the recognition of interest in amounts owing to the government and from new borrowings acquired during the period.
Revenue for the period rose 4.98% to RM34.95 billion from RM33.29 billion a year ago due to the lower over-recoverability of the ICPT recognised during the period of RM288.8 million compared with RM1.93 billion a year ago.
TNB expects unit electricity demand to grow in line with the projected gross domestic product growth for this year, which was recently revised upwards to 4.8% from 4.5% by the International Monetary Fund.
“Notwithstanding the above, the board remains cautious on the group’s outlook for the year ending Aug 31, 2017, given the prospect of volatility in global commodity and energy prices,” it said.
TNB’s share price rose 0.14% to close at RM14.24 yesterday with a total of 14.41 million shares traded, giving it a market capitalisation of RM80.70 billion.