KUALA LUMPUR (Aug 30): Tenaga Nasional Bhd's revenue soared to a record high of RM19.14 billion for the second quarter ended June 30, 2022 (2QFY22) — up 53.86% from RM12.44 billion a year ago — of which RM6.3 billion was the group's under-recovery of Imbalance Cost Pass-Through (ICPT) position, as opposed to RM314.6 million peviously.

However, the group's receivables expanded at a much faster pace to RM19.17 billion — also a record high — which is triple the RM6.27 billion it recorded in the previous corresponding quarter of 2QFY21, and up 36.26% from RM14.07 billion 1QFY22, TNB's bourse filing showed.

According to TNB, higher receivable balances were due to RM5.8 billion worth of receivables due from the government and continued hike in fuel prices, which have also resulted in the utility group having higher borrowing balances.

"TNB is in discussions with the government on the timing of the full recovery of the RM5.8 billion. The government will also guarantee TNB's financing of up to RM6 billion to fund the additional generation cost," it said.

The receivables due from the government comes from its decision to keep the effective electricity tariff for Peninsular Malaysia unchanged, in a bid to tame increasing costs of living. 

As such, the government has subsidise the utility company for it to maintain the tariff and surcharge unchanged at 3.7 sen/kWh for non-domestic customers, and a rebate of 2 sen/kWH for domestic customers.

TNB made a net profit of RM872.5 million for 2QFY22, up 6.17% from 2QFY21's RM821.5 million, mainly due to higher operating profit, which grew 24.06% to RM2.63 billion from RM2.12 billion amid lower net loss on financial instruments. This was partially offset by a significant increment in foreign currency translation loss and higher tax expenses. 

Its earnings per share rose to 15.23 sen from 14.39 sen registered previously.

A 20 sen dividend was declared — two sen less than what it announced in 2QFY21 — with the payment dates to be announced later.

It is worth noting that the utility giant's net cash generated from operation shrank substantially to RM1.88 billion in 2QFY22 compared with RM9 billion a year ago.  

To sustain its operation's cash flow, TNB drew down borrowings of RM14.8 billion during the quarter under review, compared with RM1.5 billion a year ago.

Based on its issued share capital of 5.753 billion, an interim dividend of 20 sen per share will cost the group roughly RM1.15 billion.

Compared with 1QFY22, TNB net profit went down slightly from RM893.1 million despite revenue increasing 22.24% from RM15.66 billion.

For the first six months ended June 30 (1HFY22), TNB’s net profit slipped to RM1.77 billion from RM1.78 billion in 1HFY21, despite higher revenue, mainly because of higher tax expenses — including RM257.3 million for Cukai Makmur or Prosperity Tax.

Its cumulative revenue climbed 45.49% to RM34.8 billion from 1HFY21's RM23.92 billion, mainly due to the under-recovery of ICPT of RM9.81 billion, compared with the over-recovery position of RM12.7 million recorded previously.

Looking ahead, TNB said it continues to face challenges and remains susceptible to high fuel prices — which have resulted in high receivables balances — despite being supported by higher electricity growth of 5% year-on-year in 1HFY22, which is consistent with overall 6.9% growth of the Malaysian economy in the same period.

“TNB foresees a reasonable performance for the year 2022, while remaining cautious on the prolonged impact of high fuel price and customer’s credit risk outlook. The group will continue to take prudent measures in terms of its operational and financial requirements to ensure it remains resilient,” it added.

TNB’s share price finished 22 sen or 2.51% higher at RM8.99 on Tuesday, bringing the group a market capitalisation of RM51.7 billion.