Tenaga's Profit Doubles After Power Rate Increase

29/01/2007

Tenaga Nasional Bhd fiscal first-quarter profit doubled after raising power prices last year and getting customers to pay overdue bills. Net income climbed to 1.25 billion ringgit ($357 million), or 29.8 sen a share, in the three months ended Nov.30 from 595.6 million ringgit, or 14.8 sen, a year earlier. Sales climbed 14 percent to 5.6 billion ringgit. Tenaga, which is controlled by the government, raised power prices in June by 12 percent, the first increase in 12 years, allowing the company to cut debt and fund power-line upgrades. Shares of Tenaga have risen 45 percent in the past year, more than the 30 percent gain in the benchmark Kuala Lumpur Composite Index. The earnings were released after market close. Tenaga was unchanged at 12.20 ringgit. Energy, Water and Communications Minister Lim Keng Yaik said on Jan. 17 the government’s negotiations with the power producers to lower the charges may be concluded by the end of this month. Tenaga may offer to extend the power producers’ contracts in return for a payment cut, Lim said. Tenaga is interested in buying a stake in a project to lay an undersea power cable from Borneo to Peninsular Malaysia, though hasn’t received an invitation to invest, Tenaga Chief Executive Officer, Dato’ Sri Che Khalib Mohamad Noh told reporters yeterday. Foreign investors own 25 percent of the company as of yesterday, according to Tenaga’s stock exchange filing. Dato’ Sri Che Khalib also said yesterday the company is considering raising the 25 percent limit on foreign ownership to attract investors. “At the end of the day, if you want to make Tenaga a global company, having a 25 percent restriction will not be something we could, should live with,’’ he told reporters.