Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — Q2 FY2021 Earnings Presentation
40 slides from Tenaga Nasional Bhd's earnings presentation, Aug 27, 2021
Slide 1: Presentation to Analysts Q2 2021
Q2 2 0 2 1 PRESENTATION TO ANALYSTS 27TH AUGUST 2021 Unaudited Consolidated Result for the 2nd Quarter FY2021 Ended 30th June 2021
Slide 2: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 OUTLOOK 04 APPENDIX 2
Slide 3: Key highlights of the period
Key highlights of the period 01 02 03 Strong results for 1st half and continued Sustainability Pathway Journey Delivering on dividends working capital management, albeit challenges ahead • Operating performance remain resilient. • TNB's Sustainability Pathway up to 2050 endorsed • TNB consistently h
Slide 4: 1HFY'21 performance remain robust on improved economic activities
Our 1HFY’21 performance remain robust on improved economic activities; albeit some challenges ahead EBITDA (RM mil) PROFIT AFTER TAX (RM mil) +4.5% Robust performance despite some challenges 9,710.3 9,291.3 EBITDA margin sustained at 40.6% Our EBITDA performance includes : +29.1% o Generation busine
Slide 5: Steady return on shareholder value as TNB consistently delivers against dividend policy
Steady return on shareholder value as TNB consistently delivers against dividend policy Dividend Payout (RM’ bil) 1.26 1.26 DIVIDEND POLICY Dividend Payout (%) Distribution of dividend is based on 30% to 60% (based on Adjusted 59.0 53.1 dividend payout ratio, based on the reported PATAMI) Consolidat
Slide 6: Maintaining robust operational performance through a challenging period
Maintaining robust operational performance through a challenging period Our domestic networks achievement with lower system minutes and SAIDI are among the best in Southeast Asia, putting us on par with developed electricity systems/industries such as France and the UK. Equivalent Plant Availability
Slide 7: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 OUTLOOK 04 APPENDIX 7
Slide 8: Sustainability is at the center of TNB's core purpose and strategy
Sustainability is at the center of TNB’s core purpose and strategy TNB’S ROLE TO THE NATION TNB HAS STARTED THIS JOURNEY STRENGTHENING SUSTAINABILITY COMMITMENTS TODAY • Today, TNB strengthens our • As the key electricity provider and • TNB started our sustainability journey sustainability commitmen
Slide 9: Reimagining TNB journey
In 2016, we embarked on our Reimagining TNB journey to prepare for decarbonization, decentralization, digitalization and deregulation TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Future Generation Sources Grid of the Future Winning the Customer Future Proo
Slide 10: Progressing well on Renewables and Grid of The Future
We are progressing well – in particular on Renewables and Grid of The Future 1 TNB RE Journey 8,300 2 Grid of the Future 1,800 Installed Capacity (MW) Smart Utility will enable us to : 5,200 2,733 Towards becoming a • Deliver a resilient, reliable and high power quality 361 grid with bidirectional e
Slide 11: Sustainability pathway towards 2050
Today we reveal our sustainability pathway towards 2050, which we believe will open new growth opportunities whilst remaining true to our core role Target of 8.3GW RE by 2025 Commitment of 35% reduction of our emission intensity by 2035 Aspire to achieve Net Zero emissions by 2050 Our Target for 202
Slide 12: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 OUTLOOK 04 APPENDIX 12
Slide 13: Electricity demand is expected to recover during the year
Electricity demand is expected to recover during the year • TNB electricity demand is expected to recover this year, in tandem with the projected growth for Malaysia gross domestic product (GDP). • Despite the re-imposition of nationwide containment measures or MCO, we expect the impact to be less s
Slide 14: Focus to strengthen non-regulated business while ramping up sustainability
Our focus is to strengthen our non-regulated business, while ramping up our sustainability efforts to deliver value to our shareholders GenCo Main focus includes: • Performance – To deliver sustainable returns by ensuring high availability and reliability for key assets. • Growth – To capture new cl
Slide 15: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 OUTLOOK 04 APPENDIX 15
Slide 16: Year-on-year (Y-o-Y) analysis
Year-on-year (Y-o-Y) analysis Variance Y-o-Y PAT includes: RM mil 1HFY'21 1HFY'20 RM mil % 1 Higher revenue due to higher sales Revenue 1 23,919.0 22,545.3 1,373.7 6.1 of electricity and lower ICPT Operating expenses (without depreciation) (13,945.1) (13,437.9) (507.2) 3.8 rebate Net loss on impairm
Slide 17: Quarter vs Previous Quarter analysis
Quarter vs Previous Quarter (2QFY’21 vs 1QFY’21) analysis Variance RM mil 2QFY'21 1QFY'21 Q vs Previous Q PAT includes: RM mil % Revenue 1 12,441.0 11,478.0 963.0 8.4 1 Higher Revenue mainly due Operating expenses (without depreciation) 2 (7,445.6) (6,499.5) (946.1) 14.6 to higher sales of electrici
Slide 18: Y-o-Y normalised EBITDA & PAT for 1HFY'21
Y-o-Y normalised EBITDA & PAT for 1HFY’21 EBITDA 1HFY'21 1HFY'20 1 MFRS 16 impact for 1HFY’21 includes deferred tax. Please refer Components RM mil RM mil MFRS16 impact slide for details. Reported EBITDA 9,710.3 9,291.3 2 Impairment of investment in GMR 276.4 - Higher Normalised EBITDA and PAT in 1H
Slide 19: Generation Business earnings due to hydro performance
Generation Business earnings due to hydro performance REVENUE (RM mil) EBITDA (RM mil) PROFIT AFTER TAX (RM mil) 9,756.7 2,166.6 871.8 4,656.9 5,099.8 1,201.1 570.1 965.5 301.7 20.7% 23.6% 22.2% 1QFY'21 2QFY'21 1HFY'21 1QFY'21 2QFY'21 1HFY'21 1QFY'21 2QFY'21 1HFY'21 EBITDA Margin 1HFY’21 PAT was mai
Slide 20: International Business Performance
International Business Performance Vortex Solar UK Limited EM: 83% Tenaga Wind Ventures (TWV) EM: 71% Shuaibah EM: 80% E B I T DA ( m i l ) E B I T DA ( m i l ) E B I T DA ( m i l ) 530.61 493.27 19.66 27.26 17.86 22.67 11.93 9.27 141.50 9.40 6.68 131.54 GBP USD GBP USD SAR USD 1HFY'20 1HFY'21 1HFY'
Slide 21: International Business Performance
International Business Performance GMR Energy Limited (GEL) EM: 25% GAMA Enerji A.S. (GEAS) EM: 31% TNB Liberty Power Limited (LPL) EM: 26% E B I T DA ( m i l ) 1 E B I T DA ( m i l ) 1,2 E B I T DA ( m i l ) 1,532.74 3,379.26 442.35 55.73 1,069.35 1,949.25 47.04 26.46 260.50 6.69 9.80 40.17 INR USD
Slide 22: Ensuring revenue from coal remains below 25%
Ensuring revenue from coal remains below 25%, towards longer-term aspiration Group Revenue forecast FY2021 (%) Group Revenue Forecast FY2025 (%) 5 4 10 * 9* * 24 67 61 20 RE Related to Energy Coal Others ** Transition (ET) * Assumed RP3 proposed numbers ** Others include revenue from regulated entit
Slide 23: Regulated CAPEX spending is on track
Regulated CAPEX spending is on track RM mil 3,120.0 3,574.0 RP2 EXTENSION REGULATED ENTITIES CAPEX 42.4 FY IBR Approved Actual YTD Utilization 384.1 426.2 (RM mil) (RM mil) (%) 503.3 3,109.1 2021 7,295.7 42.6% As at Jun’21 2,115.9 The balance of the Regulated CAPEX for FY2021 is RM4,186.6mil 1,627.1
Slide 24: Higher sales of electricity due to improved economic activities
Higher sales of electricity due to improved economic activities under current MCO guidelines 1 2QFY’21 vs 1QFY’21 : Higher unit sold & sales of Variance Variance electricity are mainly due to domestic sector 2QFY'21 1QFY'21 1HFY'21 1HFY'20 (2QFY'21 vs 1QFY'21) (1HFY'21 vs 1HFY'20) resulted from MCO
Slide 25: Other regulatory adjustment to be returned
As at 1HFY’21, RM251.5mil of other regulatory adjustment to be returned mainly due to higher average selling price from price cap entity 1QFY’21 2QFY’21 1HFY’21 Components of Other Regulatory Adjustment (RM mil) (RM mil) (RM mil) 1 Revenue Adjustment for Revenue Cap & Price Cap (10.8) (132.2) (143.0
Slide 26: Y-o-Y electricity demand improved in tandem with GDP
Y-o-Y electricity demand improved in tandem with GDP GDP & TNB (Peninsula) Demand Growth TNB (Peninsula) Maximum Demand 5.9 % 5.0 4.7 4.3 4.2 1HFY’21 1HFY’20 Variance (%) Maximum 18,366 18,808 -2.4 2.5 2.5 3.2 2.7 Demand (GWh) 2.2 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 -4.9 TNB (Peninsula) Yearly Peak
Slide 27: Higher Y-o-Y electricity demand from improved industrial sector
Higher Y-o-Y electricity demand from improved industrial sector due to resumption of business operation Industrial Commercial 11.2% (1.0%) 1HFY’21 main contributors for the drop (8.4%) (10.7%) (12.6%) 14.2% 0.2% 0.2% 7.5% 15.4% in commercial sector: • Accommodation • Educational • Transportation 10,
Slide 28: Higher Y-o-Y operating expenses due to increase in subsidiaries cost
Higher Y-o-Y operating expenses due to increase in subsidiaries cost Variance Variance 1 2QFY'21 1QFY'21 1HFY'21 1HFY'20 2QFY’21 vs 1QFY’21 : Higher generation cost (1QFY'21 vs 4QFY'20) (1HFY'21 vs 1HFY'20) mainly due to higher coal price (RM mil) (RM mil) (RM mil) (RM mil) RM mil % RM mil % 1HFY’21
Slide 29: Lower Y-o-Y fuel cost mainly due to reduction in gas price
Lower Y-o-Y fuel cost mainly due to reduction in gas price Table A – TNB & IPP Fuel Costs for Peninsula (RM mil) Table C – Fuel Costs Related Data Variance 1HFY’21 1HFY’20 Fuel Type 1HFY'21 1HFY'20 Daily Average Piped Gas Volume (mmscfd) 770 707 RM mil % Coal 5,563.4 4,818.9 744.5 15.4 1Q – 15.40 1Q
Slide 30: Higher 2Q vs 1Q fuel cost from higher fuel prices
Higher 2Qvs1Q fuel cost from higher fuel prices Table A – TNB & IPP Fuel Costs for Peninsula (RM mil) Table C – Fuel Costs Related Data Variance 2QFY’21 1QFY’21 Fuel Type 2QFY'21 1QFY'21 RM mil % Daily Average Piped Gas Volume (mmscfd) 817 722 Coal 2,938.6 2,624.8 313.8 12.0 Gas Reference Market Pri
Slide 31: Higher units generated from hydro in 1HFY'21
Higher units generated from hydro in 1HFY’21 due to monsoon season GENERATION MIX FOR INDUSTRY (%) 0.7 0.8 0.7 0.7 0.7 0.9 0.9 2.7 3.0 4.5 4.9 3.8 6.6 5.8 0.0 0.0 0.0 0.0 0.0 0.1 0.1 65.6 66.2 64.6 65.8 59.1 66.9 61.9 31.0 34.1 30.0 27.9 29.8 29.7 30.5 1QFY'20 2QFY'20 3QFY'20 4QFY'20 FY'20 1QFY'21 2
Slide 32: Fuel costs (TNB & IPPs – Peninsula)
Fuel costs (TNB & IPPs – Peninsula) Fuel Costs Units Generated Oil IPP, 0% Oil TNB, 0% Oil IPP, 0% Dist. IPP, 0% Coal IPP, 24% Oil TNB, 0% Coal IPP, 23% Dist. IPP, 0% Dist. TNB, 0% Dist. TNB, 0% Coal TNB, 35% Solar IPP, 0% Coal IPP, 23% Solar TNB, 0% Coal TNB, 46% Coal TNB, 35% Dist. TNB, 0% Coal IP
Slide 33: Continuous effective ICPT implementation neutralises fuel cost fluctuation
Continuous effective ICPT implementation neutralises the fluctuation in fuel costs 2QFY' 20 3QFY’ 20 4QFY’ 20 1QFY' 21 2QFY' 21 (R M mil) (R M mil) (R M mil) (R M mn ) (R M mn ) Reported Total Cost of Generation 4,415.0 4,404.5 3,745.9 4,199.9 5,033.5 (with MFRS16) Adjustment not related to IBR 975.
Slide 34: Coal price is on an increasing trend in FY2021
Coal price is on an increasing trend in FY2021 Coal Price Trending 458.1 422.6 428.4 395.8 376.6 411.1 379.8 362.7 361.4 361.2 347.7 337.5 375.3 347.0 361.7 352.0 359.9 321.6 325.0 340.5 331.3 327.9 291.9 294.9 320.3 301.9 281.1 256.2 254.1 254.6 289.3 248.6 243.2 236.5 248.2 249.0 233.0 230.2 236.2
Slide 35: Higher coal requirement for FY2021
Higher coal requirement for FY2021 Average Coal Price (CIF) FY'14 FY'15 FY'16 FY'17 FY'18 FY’19 FY’20 1HFY’21 USD/metric tonne (MT) 75.4 66.0 55.7 72.7 95.9 79.3 60.6 86.0 RM/metric tonne (MT) 244.6 236.0 231.1 314.7 388.1 326.3 255.6 352.2 Coal Consumption Country Mix (mil MT) 1.0% 34.7 36.3 14.0%
Slide 36: Net impact of MFRS 16 reduced group PAT
The net impact of MFRS 16 reduced the group PAT by RM286.4mil Net Impact of MFRS 16 (Y-o-Y) analysis 1HFY'21 1HFY'20 Variance Remarks (RM mil) (RM mil) (RM mil) Decreasing EBITDA and PAT Capacity Payment 2,130.6 2,237.3 (106.7) in 1HFY'21 Depreciation (1,756.1) (1,826.0) 69.9 Increasing PAT in 1HFY'
Slide 37: Cash flow remain resilient despite increase in trade debtors
Our cash flow remain resilient despite increase in trade debtors Trade Debtors Ageing (RM bil) Trade Debtors By Sectors Total 4.64 4.41 4.62 5.22 2% 2% 2% 2% Undue 0.02 30% 33% 0.01 35% 35% Others Current 0.02 0.02 1.33 1 Month 1.17 1.04 1.14 Domestic 0.37 0.31 0.28 0.36 0.86 42% 38% 37% 37% 2 to 5
Slide 38: Gearing stood at 46.2% in 1HFY'21
Gearing stood at 46.2% in 1HFY’21, capital headroom remains healthy Statis tics 30 th Jun'21 31 st Dec'20 Total Debt (RM' Bil) 49.2 49.5 RM Equivalent of Loan Value (bil) Net Debt (RM' Bil)* 37.4 36.0 Gearing (%) 46.2 46.3 74.2% Net Gearing (%) 35.1 33.7 37.0 Fixed : Floating 36.5 Underlying 95:5 95
Slide 39: TNB market capitalisation of RM56.1bil as at 30th June 2021
TNB market capitalisation of RM56.1bil as at 30th June 2021 Top 10 KLCI Stocks by Market Capitalisation Khazanah Nasional Berhad RM bil 18.4 17.8 Maybank 94.8 (0.3%) Permodalan Nasional Berhad 95.1 (PNB) 79.8 18.5 17.7 Public Bank (0.2%) Employees Provident Fund 80.0 Board (EPF) 7.3 Petronas Chemica
Slide 40: Thank You / Disclaimer
THANK YOU CoE INVESTOR RELATIONS GROUP FINANCE DIVISION Tenaga Nasional Berhad 4th Floor, TNB Headquarters No.129, Jalan Bangsar, 59200 Kuala Lumpur, MALAYSIA Tel : +603 2108 2128 Fax : +603 2108 2034 Email : tenaga_ird@tnb.com.my Website : www.tnb.com.my IR OFFICERS: 1) Mehazatul Amali Meor Hassan
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