TNB's Q1 net profit falls on US dollar strength

PETALING JAYA: Tenaga Nasional Bhd’s (TNB) net profit for the first quarter ended Nov 30, 2016 fell 11.9% to RM1.74 billion from RM1.98 billion a year ago, mainly due to the strengthening of the US dollar against the ringgit.

Its revenue increased by 5.3% to RM11.24 billion from RM10.68 billion in the same period last year due to the increase in the group’s electricity sales, mainly in Peninsular Malaysia.

The utility giant said in a statement the US dollar’s strength had resulted in the group incurring a foreign exchange translation loss of RM230 million, compared with RM60 million in the corresponding period last year.

TNB said it continues to invest in capital expenditure (capex) that will ensure the country’s energy capacity requirement is met and overall system efficiency, security and reliability are maintained.

Currently, there are three power generation projects, namely Manjung 5, Jimah East Power and Tembat with over 3,000-megawatt capacity being carried out. These projects are due to be completed between 2017 and 2019 and the capex investment represented 45.4% of the group’s total capex investment of RM2.07 billion in the first quarter of financial year 2017 (FY17).

TNB said its board of directors recognises that a potential widening of global imbalances coupled with volatility in currency exchange rates will be a challenging risk. Thus, the board continues to remain cautious on the group’s prospects for FY17.