KUALA LUMPUR (Sept 26): Tenaga Nasional Bhd (TNB) expects a decline in its imbalance cost pass-through (ICPT) receivables, primarily due to the moderation of coal prices and as it fully recovered RM10.4 billion of ICPT costs for the first half of 2023.  

The national utility group expects to recover RM4.7 billion of ICPT costs from the government in the second half of the year, it said in a statement. 

The latest development will improve its working capital and cash flow levels in 2023, and subsequently gearing levels, said its president and CEO Datuk Baharin Din.

Looking ahead to the first half of the 2024 financial year, TNB anticipates a recovery of approximately RM7 billion from ICPT, based on current fuel price trends, reflecting the company's proactive approach to managing its financial outlook and controlling fuel-related expenditures.

In the statement, TNB president and CEO Datuk Baharin Din said that additionally, the company's proactive revenue collection approach has paid off.

“TNB’s prudent capital management enables the company to reward the shareholders with an interim dividend of 18 sen, which accounts for 49.4% of the adjusted profit after tax [and] minority interest (Patami),” Baharin said during a recent analyst briefing on the group's second-quarter financial results.

Also supporting TNB's financial position is the government-guaranteed loan of RM6 billion to stabilise the energy industry, which was announced in August 2022.

At end-June, TNB's receivables had dropped to RM15.1 billion against the RM22.88 billion recorded at end-December 2022, mainly due to lower ICPT receivables as the utility group recognised lower fuel costs, in tandem with the drop in global fuel energy prices.

Cash balance rose to RM13.83 billion, from just RM4.89 billion six months ago. In the six-months ended June, TNB's net cash from operations had strengthened to RM16.36 billion from RM1.89 billion in the same period last year.

In the first half ended June 30, 2023 (1HFY2023), TNB net profit fell 24.6% to RM1.33 billion from RM1.77 billion a year ago, on lower ICPT under-recovery, higher forex loss and finance costs, offset by lower tax incurred. Revenue slipped 3.8% year-on-year to RM25.95 billion, from RM24.99 billion.

At noon break, TNB shares fell two sen or 0.2% at RM10.12, translating into a market capitalisation of RM58.6 billion.