TNB's Financial Performance Impacted By Continued Use of Alternative Fuels

17/01/2012

Kuala Lumpur, 17 January 2012 - Tenaga Nasional Berhad (TNB) today announced a net loss of RM224.7 million, for the 1st Quarter of the Financial Year ending 31 August 2012 (FY2012).

Summary of highlights:

- Net loss of RM224.7 million - 29.5% increase in Operating Expenses Year-on-Year due to continued use of oil and distillate - 3.9% unit electricity demand growth in Peninsular Malaysia - Lower EBITDA margin of 15.1% compared to 28.5% for the corresponding period in FY2011

The Group’s Year-on-Year results was severely impacted due to continued use of alternative fuels to generate electricity. Oil consumption had increased by almost 26 times from 10,554 MT in the 1st Quarter FY2011 to 271,949 MT in the current quarter. The total amount incurred for oil in the current quarter was RM593.3 million as compared to RM16.4 million in the corresponding period in the last financial year. Distillate consumption had also increased by 28 times from 6.0 million litres in the 1st Quarter FY2011 to 168.9 million litres in the current quarter. The total amount incurred for distillate in the current quarter was RM413.8 million as compared to RM17.6 million for the same period in the last financial year. This has contributed significantly to the 29.5% increase in operating expenses against a 12.5% increase in Group revenue. As a consequence, the Group reported a lower EBITDA margin of 15.1% as compared to 28.5% reported in the 1st quarter of FY2011.

Commenting on the Group’s electricity demand growth, TNB’s Chairman, Tan Sri Leo Moggie commented that “analysis of electricity growth year-on-year in Peninsular Malaysia shows demand growth at 3.9% during the 1st Quarter of FY2012, driven principally by the industrial and commercial sectors that recorded demand growth of 4.8% and 3.3% respectively. The strong demand from the industrial sector is supported by the high Industrial Production Index seen in November 2011”.

TNB’s President/Chief Executive Officer, Dato’ Sri Che Khalib Mohamad Noh elaborated on the operating expenses, in particular the impact from increased generation costs from using alternative fuels. He commented that “comparing the Group’s performance in the current quarter against the preceding quarter, operating costs was lower mainly due to reduced usage of distillate and lower cost of repairs and maintenance.”

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