Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — Q2 FY2022 Earnings Presentation
41 slides from Tenaga Nasional Bhd's earnings presentation, Sep 1, 2022
Slide 1: Presentation to Analysts 2QFY2022
Presentation to Analysts 2QFY2022 Unaudited Consolidated Results for the 2nd Quarter FY2022 Ended 30 June 2022 1 September 2022 Tenaga Nasional Berhad 199001009294 (200866-W)
Slide 2: Key Highlights: Delivering on our performance and value to our shareholders
Key Highlights: Delivering on our performance and value to our shareholders, while we ensure sustainable growth 1 1HFY22 Performance 2 Delivering value to our 3 Sustainable Growth shareholders a) Resilient 1HFY22 a) a) a) Proactive measures financial performance to address ICPT Dividend payout refle
Slide 3: Resilient 1HFY22 financial performance on the back of higher electricity demand
Resilient 1HFY22 financial performance on the back of higher electricity demand 1a of 5.0% year-on-year for the Group in line with continued economic growth REVENUE EBITDA PROFIT AFTER TAX ▪ Increase in TNB sales of electricity, ▪ Includes higher Group electricity revenue ▪ Includes MFRS16 impact fr
Slide 4: Solid technical operations maintaining world-class standards
Supporting our financial performance is solid technical operations, maintaining 1b world-class standards despite the challenging operating environment Equivalent Plant Availability Factor, EAF System Minutes SAIDI (Generation) (Transmission) (Distribution Network) % Minutes Minutes • 2Q performance
Slide 5: Dividends declared reflect prudent capital management
Dividends declared reflect prudent capital management while payouts 2 remain robust relative to KLCI performance Dividend Policy Dividend payout ratio of 30% to 60% based on the adjusted PATAMI Dividends declared have been robust relative to KLCI performance Dividend Payout (%) (based on Adjusted 47
Slide 6: Proactive measures achieved milestone in managing high fuel prices and capital requirements
Our proactive measures have achieved an important milestone in managing 3a the high fuel prices and our capital requirements. Our credit ratings remain stable. Total Receivables (RM bil) Prudent & Proactive Working Capital Management 19.2 ICPT Cost Recovery Average RM5.8 bil 63% Collection Rate 63%
Slide 7: TNB's fast-track energy transition plan ensures sustainable business growth
TNB’s fast-track energy transition plan ensures sustainable business growth 3b while meeting our ESG commitments GenCo NED Grid EV GenCo aims to capture estimated ~USD7 bil equity investment by Regulated asset base (RAB) for Grid We will invest RM90 mil to RM40 bil revenue from domestic 2050 + DN to
Slide 8: GenCo decarbonisation roadmap to net zero by 2050
We start with GenCo as the biggest lever with major shifts to RE and new green technologies towards the future… TNB’s decarbonisation roadmap to achieve net zero emission by 2050 and be coal-free by early 2040s, ahead of initial milestone GenCo’s next moves to fast track decarbonization GenCo aims t
Slide 9: Pioneering green hydrogen and CCS with MoU with Petronas
… pioneering in green hydrogen and Carbon Capture & Storage (CCS) with the signing of MoU with Petronas (19 August 2022) Partnership with Petronas to enable TNB to repower Paka by co-firing Green Hydrogen ▪ Collaborative/Joint feasibility study on the application of CCS solutions at TNB power genera
Slide 10: New Energy Division to expand renewable energy portfolio
TNB’s New Energy Division (NED) will continue to expand our renewable energy portfolio on both domestic and international grounds as we build capability and gain access to technology and market knowledge Asset development and business expansion NED’s Projected Growth Of Installed RE Capacity1 Geogra
Slide 11: The Grid is critical infrastructure to enable energy transition
The Grid is a critical infrastructure to enable energy transition. TNB will continue to invest to strengthen the grid and network infrastructure in Peninsular Malaysia, balancing grid security, sustainability and affordability. For RP3, RM2.6 billion is allocated for Energy Transition. Spurring grow
Slide 12: TNB aims to accelerate BEV adoption
TNB aims to accelerate the BEV adoption to capture RM1.3 billion market value by 2030 and welcomes collaboration with strategic partners to stimulate the growth of BEV ecosystem TNB will invest RM90 mil to support BEV 2025 EV Market Potential 2030 EV Market Potential ecosystem over the span of 3 yea
Slide 13: Forward Guidance
Forward Guidance The Group foresees a reasonable performance for the year 2022 despite a challenging environment ELECTRICITY DEMAND DELIVERING VALUE TO OUR SHAREHOLDERS Full year demand growth of 1.7% We will continue to honour our @ 115,835 GWh as per dividend policy of IBR determination 30% - 60%
Slide 14: Appendix
2Q FY2022 o Details on Financial Results o GenCo Performance o International Business Performance o Shareholdings Analysis Appendix
Slide 15: Year-on-Year (Y-o-Y) analysis
Year-on-Year (Y-o-Y) analysis Variance RM mil 1HFY22 1HFY21 RM mil % Revenue 34,798.8 23,919.0 10,879.8 45.5 Y-o-Y analysis : 1 Operating expenses (without depreciation) (24,571.4) (13,945.1) (10,626.3) 76.2 1 Higher revenue mainly due to 2 ICPT surcharge of RM9,808.0 Net loss on impairment of finan
Slide 16: Quarter vs Previous Quarter (2QFY22 vs 1QFY22) analysis
Quarter vs Previous Quarter (2QFY22 vs 1QFY22) analysis Variance RM mil 2QFY22 1QFY22 RM mil % Q vs Previous Quarter analysis : Revenue 1 19,140.3 15,658.5 3,481.8 22.2 Operating expenses (without depreciation) 2 (13,907.8) (10,663.6) (3,244.2) 30.4 1 Higher revenue mainly due to Net loss on impairm
Slide 17: Y-o-Y normalised EBITDA & PAT for 1HFY22
Y-o-Y normalised EBITDA & PAT for 1HFY22 1 EBITDA 1HFY22 1HFY21 Please refer MFRS16 impact slide for details. Components RM mil RM mil Reported EBITDA 10,576.9 9,710.3 2 Impairment - 455.8 Lower Normalised PAT in 1HFY22 mainly due to: Additional ADD for TNB* 46.9 364.2 MFRS16 impact 1 (2,203.0) (2,1
Slide 18: Higher Y-o-Y sales of electricity and contribution from subsidiaries
Higher Y-o-Y sales of electricity and contribution from subsidiaries due to less business restrictions Variance Variance 2QFY22 1QFY22 1HFY22 1HFY21 (2QFY22 vs 1QFY22) (1HFY22 vs 1HFY21) 1 UNITS SOLD GWh GWh GWh % GWh GWh GWh % 2QFY22 vs 1QFY22 and 1HFY22 vs 1HFY21 : Sales of Electricity (GWh) Highe
Slide 19: Other regulatory adjustment to be returned
As at 1HFY22, RM451.4 mil of other regulatory adjustment to be returned 1QFY22 2QFY22 1HFY22 Components of Other Regulatory Adjustment (RM mil) (RM mil) (RM mil) 1 Revenue Adjustment for Revenue Cap & Price Cap (44.2) (239.4) (283.6) Refund Related to Regulated Business (113.1) (63.9) (177.0) Regula
Slide 20: Y-o-Y electricity demand in tandem with GDP
Y-o-Y electricity demand in tandem with GDP % GDP & TNB (Peninsula) Demand Growth 5.9 5.0 Full Year 4.2 4.7 4.3 TNB (Peninsula) Yearly Peak Demand 3.1 * MW 19,183 2.5 2.5 3.2 2.7 2.2 18,808 1.2 18,566 FY15 FY16 FY17 FY18 FY19 FY20 FY21 18,338 -4.9 17,790 18,585 17,788 Recorded on: -5.6 16,901 16,822
Slide 21: Higher Y-o-Y TNB (Peninsula) electricity demand driven by growth in all sectors
Higher Y-o-Y TNB (Peninsula) electricity demand driven by growth in all sectors Industrial Commercial 1HFY22 main contributors for 2.7% the increase in commercial 13.9% sector: • Retails (11.1%) 1.0% (0.2%) 5.8% • Accommodation services (16.4%) 4.4% 10.2% 17.6% • Business services Unit Sales (GWh) G
Slide 22: Higher Y-o-Y operating expenses due to increase in generation cost
Higher Y-o-Y operating expenses due to increase in generation cost Variance Variance 2QFY22 1QFY22 1HF22 1HFY21 (2QFY22 vs 1QFY22) (1HFY22 vs 1HFY21) (RM mil) (RM mil) (RM mil) (RM mil) RM mil % RM mil % 1 2QFY22 vs 1QFY22: Higher generation cost Non-TNB IPPs Costs 4,123.7 3,440.6 683.1 19.9 7,564.3
Slide 23: Higher Y-o-Y fuel cost mainly due to higher fuel prices
Higher Y-o-Y fuel cost mainly due to higher fuel prices Table A – TNB & IPP Fuel Costs for Peninsula (RM mil) Table C – Fuel Costs Related Data Variance 1HFY22 1HFY21 Fuel Type 1HFY22 1HFY21 Daily Average Piped Gas Volume (mmscfd) 909 770 RM mil % 1Q Tier 1 : 30.0 Coal 13,392.2 5,563.4 7,828.8 >100.
Slide 24: Higher 2Q vs 1Q fuel cost mainly due to higher fuel prices
Higher 2Q vs 1Q fuel cost mainly due to higher fuel prices Table A – TNB & IPP Fuel Costs for Peninsula (RM mil) Table C – Fuel Costs Related Data Variance 2QFY22 1QFY22 Fuel Type 2QFY22 1QFY22 Daily Average Piped Gas Volume (mmscfd) 905 912 RM mil % Tier 1 : 30.0 Tier 1 : 30.0 Coal 8,410.4 4,981.8
Slide 25: Higher units generated from coal in 2QFY22 vs 1QFY22
Higher units generated from coal in 2QFY22 vs 1QFY22 GENERATION MIX FOR INDUSTRY (%) 0.9 0.9 0.9 0.8 0.9 0.9 1.2 6.6 5.0 5.1 5.2 5.4 4.8 3.5 0.1 0.0 0.1 0.3 0.1 1.1 0.4 61.9 60.9 59.2 57.7 57.8 56.5 54.1 37.6 36.0 39.1 37.1 33.0 34.3 30.5 1QFY21 2QFY21 3QFY21 4QFY21 FY21 1QFY22 2QFY22 Gas Coal Oil &
Slide 26: Fuel Costs & Units Generated (TNB & IPPs – Peninsula)
Fuel Costs & Units Generated (TNB & IPPs – Peninsula) Fuel Costs Units Generated Dist. IPP, 0.7% Coal IPP, 20.9% Coal IPP, 21.6% Oil IPP, 0.0% Oil TNB, 0.0% Oil IPP, 0 Dist. TNB, 0.0% Hydro, 4.1% Solar TNB, 0.1% Dist. TNB, 1.2% Oil TNB, 0 Coal IPP, 23.7% Solar IPP, 1.0% Coal IPP, 22.9% Dist. IPP, 1.
Slide 27: TNB is neutral to volatility in fuel costs covered under ICPT framework
TNB is neutral to volatility in fuel costs covered under ICPT framework 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) Reported Total Cost of Generation 5,033.5 6,107.3 8,438.1 8,367.1 11,634.6 (with MFRS16) Adjustment not related to IBR 830.9 756.6 753.6 909.5 948.3
Slide 28: Coal price trending
Coal price trending 960.40 723.70 696.30 626.40 557.21 530.47 517.93 458.12 422.60 428.44 395.92 361.40 379.84 361.22 363.40 347.03 411.10 321.56 361.70 375.30 291.87 294.87 340.50 281.12 352.05 359.91 248.60 249.03 324.99 301.88 268.24 289.33 265.81 229.76 238.77 250.78 1QFY18 2QFY18 3QFY18 4QFY18
Slide 29: Industry coal requirement forecast for FY2022
Industry coal requirement forecast for FY2022 Average Coal Price (CIF) FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 1HFY22 USD/metric tonne (MT) 75.4 66.0 55.7 72.7 95.9 79.3 60.6 116.2 198.0 RM/metric tonne (MT) 244.6 236.0 231.1 314.7 388.1 326.3 255.6 481.3 847.3 Coal Consumption (mil MT) Country Mix
Slide 30: Net impact of MFRS 16 reduced group PAT by RM474.1 mil
The net impact of MFRS 16 reduced the group PAT by RM474.1 mil Net Impact of MFRS 16 (Y-o-Y) analysis 1HFY22 1HFY21 Variance Remarks (RM mil) (RM mil) (RM mil) Increasing EBITDA and Capacity Payment 2,203.0 2,130.6 72.4 PAT in FY'22 Depreciation (1,928.7) (1,756.1) (172.6) Decreasing PAT in FY'22 Fi
Slide 31: Group CAPEX
Group CAPEX RM mil 3,326 3,574 58.3 Major Projects & Recurring Generation 453.0 426.2 Corporate & Subsidiaries 299.7 Recurring Distribution Network & Retail Recurring Transmission 2,115.9 1,880.5 RP3 REGULATED ENTITIES CAPEX FY IBR Approved Actual YTD Utilisation (RM mil) (RM mil) (%) 973.6 693.1 2,
Slide 32: Gearing stood at 51.1% in 1HFY22
Gearing stood at 51.1% in 1HFY22 3% 5% 13% Statistics 30 Jun 22 31 Dec 21 4%5% RM 15% Total Debt (RM bil) 62.6 51.7 USD Net Debt (RM bil)* 48.9 42.5 JPY Gearing (%) 51.1 47.0 DEC 21 76% Net Gearing (%) 40.1 38.6 GBP Fixed : Floating JUN 22 79% Underlying 96:4 95:5 Final Exposure 99:1 99:1 Effective
Slide 33: Initiatives to mitigate deterioration of credit risks
Continuous stringent initiatives are undertaken to mitigate deterioration of credit risks Trade Debtors Ageing (RM bil) Trade Debtors By Sectors Total 5.02 4.92 5.17 5.31 2% 1% 1% 2% Undue 0.02 0.02 0.01 0.01 35% 37% 36% 35% Current Others 1.04 1.04 1.17 1.28 1 Month 0.31 Domestic 0.32 0.30 0.39 1.0
Slide 34: Domestic generation business performance
Domestic generation business performance RM mil REVENUE EBIT PROFIT AFTER TAX 12,705.9 9,756.7 12.6% 17.1% 1,671.2 806.6 871.8 1,601.6 1HFY22 1HFY21 1HFY22 1HFY21 1HFY22 1HFY21 Higher revenue mainly due to higher energy EBIT Margin payment resulted from higher fuel prices. Note: Includes generation
Slide 35: International Business – Core/Renewable Energy Assets
International Business – Core/Renewable Energy Assets International Performance as at Jun’22 Vantage RE EM: 74% EBITDA (mil) 45.16 34.70 25.92 35.95 GBP USD 1HFY22 1HFY21 • Higher EBITDA YoY from VSUK and TWV, contributed by higher generation as a result of higher irradiance and favourable wind spee
Slide 36: International Business – Non-Core Assets
International Business – Non-Core Assets International Performance as at Jun’22 Shuaibah EM: 81% GAMA Enerji A.S. (GEAS) EM: 26% GMR Energy Limited (GEL) EM: 40% EBITDA (mil)1 EBITDA (mil)1 EBITDA (mil) 9,524.01 960.96 514.88 493.27 1,949.28 127.23 26.46 442.35 65.70 137.30 131.54 55.73 INR USD SAR
Slide 37: Our RE journey is progressing well
Our RE journey is progressing well TNB RE Journey Renewable capacity (MW) 16% 15% 3,794 3,596 993 813 2,801 2,783 Note: • RE capacity includes large hydro • Gross RE Capacity - - RE July 2022 RE April 2022 International Domestic % RE in TNB’s portfolio Recent RE Progress 1) Domestic renewables ▪ We
Slide 38: Ensuring revenue from coal remains below 25%
Ensuring revenue from coal remains below 25%, towards longer-term aspiration Actual Group Revenue 1HFY22 (%) 3 3 * RE Related to Energy Coal Others* 20 Transition (ET) * Others include revenue from regulated entities, subsidiaries and generation from gas 74 Long-term aspiration : ▪ No new coal plant
Slide 39: TNB market capitalisation of RM45.7 bil as at June 2022
TNB market capitalisation of RM45.7 bil as at 30 June 2022 Top 10 KLCI Stocks by Market Capitalisation RM bil Maybank 102.8 +4.3% Khazanah Nasional Berhad 98.6 18.4 15.8 Permodalan Nasional Public Bank 84.8 80.8 +5.0% Berhad (PNB) 18.4 17.7 Employees Provident Fund 7.3 72.0 Board (EPF) Petronas Chem
Slide 40: Disclaimer
Disclaimer This presentation and discussion may contain forward looking statements by Tenaga Nasional Berhad related to financial trends for future periods. Some of the statements contained in this presentation or arising from this discussion which are not of historical facts are statements of futur
Slide 41: Thank You
THANK YOU IR OFFICERS: 1) Sarah Keok • +603 2108 2126 INVESTOR RELATIONS • sarahk@tnb.com.my GROUP FINANCE DIVISION 2) Sakinah Mohd Ali Tenaga Nasional Berhad • +603 2108 2840 4th Floor, TNB Headquarters • sakinah.ali@tnb.com.my No.129, Jalan Bangsar, 3) Ahmad Nizham Khan 59200 Kuala Lumpur, MALAYSI
Tenaga Nasional Berhad — Q2 FY2022 Earnings Presentation on 6ix