TNB’s net profit shrinks 41.5% from higher taxes in Q2

PETALING JAYA: Tenaga Nasional Bhd’s (TNB) net profit for its second quarter ended June 30, 2020 shrank by 41.5% to RM653.3 million against RM1.12 billion reported in the same quarter of the previous year mainly due to a higher tax expense.

Revenue for the quarter stood at RM10.89 billion, a 15.4% decline from RM12.88 billion reported previously.

According to the group, electricity sales for the first half ended June 30, 2020 was affected by the closure of business premises during the movement control order (MCO), moderating to 53,535.7 GWh compared to 58,521.1 GWh registered in the same period last year.

However, electricity demand is showing an uptrend with peak demand recorded at 17,484 MW in June, 17,724 MW in July, and 18,307 MW in August.

TNB’s president and CEO Datuk Seri Amir Hamzah Azizan commented that the country is showing positive signs of economic recovery following the reopening of industrial and commercial sectors during the recovery movement control order (RMCO), which is also reflected by the upturn in electricity demand.

“We expect the positive trend to continue and stabilise in the second half of the year,” he said in a statement.

In regards to its outlook, the group noted that the Malaysian economy contracted by 17.1% in Q2’20 due to the containment measures to curb the Covid-19 pandemic which restricted production and consumption activities.

Subsequently, the Malaysian economy is expected to recover in the second half of the year as the economy reopens and external demand improves, underpinned by the rebound in key indicators wholesale and retail trade, industrial production, gross exports and electricity generation.

Against the challenging backdrop, TNB’s board foresees a prospect of a gradual recovery on its performance for the remaining quarters of the financial yea, underpinned by the improving business activities momentum aided by the timely rollout of the government’s stimulus package under its Penjana economic recovery plan.

The group has also taken prudent measures in terms of its operational and financial requirements to ensure it remains resilient.

For the cumulative six months period ended June 30, 2020 its net profit stood at RM1.37 billion, 48.7% lower than RM2.67 billion reported in the same period of the previous year.

Meanwhile, its revenue slipped by 13.7% to RM22.55 billion from RM26.12 billion registered previously.

Despite the challenging environment, TNB continues to honour its dividend policy, rewarding shareholders with a RM1.26 billion interim dividend payout which translates to dividend per share of 22 sen.

source https://www.thesundaily.my/business/tnb-s-net-profit-shrinks-415-from-higher-taxes-in-q2-EX3716600