Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — Q4 2021 Earnings Presentation
40 slides from Tenaga Nasional Bhd's earnings presentation, Feb 25, 2022
Slide 1: 4Q 2021 Presentation to Analysts
4Q 2 0 2 1 Presentation to Analysts Unaudited Consolidated Result for the 4th Quarter FY2021 Ended 31st December 2021 25th February 2022
Slide 2: Key highlights of 2021 – An Eventful Year
Key highlights of 2021 – An Eventful Year FY2021 Performance Future Highlights Resilient FY2021 financial results is consistent RP3 Financial with the increased economic activities, however RP3 approved effective challenges persist performance Feb 2022 to Dec 2024 Balance sheet position remain stron
Slide 3: FY2021 financial results consistent with increased economic activities
FY2021 financial results is consistent with the increased economic activities although some challenges continue to persist FY’21 EBITDA includes : Strong and resilient Balance Sheet • Peninsula Malaysia demand grew by 1.2% year-on-year FY’21 Profit After Tax is within market afforded by efficient ca
Slide 4: Delivering sustainable dividends for long-term shareholder value
We continue to offer long-term value for our shareholders by delivering sustainable dividends Dividend Policy Dividend payout ratio of 30% to 60% based on the adjusted PATAMI Special Dividend Payout (RM’ bil) 2.28 Yearly Dividend 2.28 2.29 Payout (RM’ bil) Dividend Payout (%) (based on Adjusted 58.5
Slide 5: Operational network performance and customer service world class
Our operational network performance and customer service experience are world class despite the 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 Franc
Slide 6: Regulated business provides stable returns under IBR framework (RP3)
Our regulated business continues to provide stable returns supported by the IBR framework. We secured a fair WACC and sufficient expenditure allowance for the next 3 years. RP3 determination (2022 -2024) RP3 Annual Average CAPEX Base Tariff 39.95 RM Mn sen/kWh No Change in 6,851 tariff schedule Supp
Slide 7: Strategy anchored on Reimagining TNB with ESG at the core
Moving forward, our strategy remains anchored on Reimagining TNB with ESG consideration at the core TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Future Grid of the Winning the Future Proof Generation Future Customer Regulation Sources MAKE THE CORE BUILD N
Slide 8: Early steps to meet Sustainability Pathway 2050 goals
We are taking important early steps to meet our Sustainability Pathway 2050 goals 1 Top Management commitment towards ESG 2 Two-pronged approach in charting the pathway Today’s Focus A MAKE THE CORE SUSTAINABLE B BUILD NEW SUSTAINABLE BUSINESSES Generation decarbonization Renewable energy Smart grid
Slide 9: ESG KPIs for management
1 Activating TNB’s 35,000 employees for the ESG shift starts at the top with ESG KPIs for management • For our Top Management, TNB has adopted a multidimensional approach to ESG that includes ESG rating, health & safety measures, integrity health index and growing its renewables capacity. ESG-relate
Slide 10: Making the core sustainable: generation decarbonization
2 A Making the core sustainable involves generation decarbonization through efficiency improvement, transitioning to cleaner capacity and embarking on new technologies 1 Efficiency improvement 2 Coal capacity phase down and build new gas capacity Efficiency Generated from Turnaround Program CURRENT
Slide 11: Sustainable business growth: RE, DER and EV
2 B Sustainable business growth includes RE expansion, distributed energy resources and electric vehicle Drive RE growth Additional RE push from Stimulate BEV market and through strategy shift retail business segment ensure infra readiness ▪ Policy advocacy for BEV proliferation via Asset developmen
Slide 12: Advancing our Sustainability Journey
Advancing our Sustainability Journey FY2022, we take … and we will take … to drive sustainable important early steps bigger strides shareholders’ value creation & growth To strengthen our We aim to make our core We are detailing our low carbon commitment, 30% of sustainable while developing pathway,
Slide 13: Forward guidance for 2022
Forward guidance for 2022 Electricity Demand CAPEX Dividend Total Forecasted at 1.7% @ RM11.8bil Continue to honour our 115,835GWh, in line Regulated recurring dividend policy of 30% - with GDP projection of RM6.9bil 60% dividend payout ratio, 5.5% to 6.5% for 2022 based on adjusted PATAMI Others RM
Slide 14: Appendix 4Q FY 2021
Appendix 4Q FY 2021 o Details on Financial Results o GenCo Performance o International Business Performance o Coal Data o Shareholdings Analysis 14
Slide 15: Year-on-year (Y-o-Y) analysis
Year-on-year (Y-o-Y) analysis Y-o-Y PAT analysis : 1 Higher revenue due to ICPT under recovery and higher sales of Variance electricity RM mil FY'21 FY'20 RM mil % Revenue 1 52,629.5 43,976.0 8,653.5 19.7 2 Includes ADD of RM714.5mil Operating expenses (without depreciation) (33,832.9) (26,510.0) (7
Slide 16: Quarter vs Previous Quarter analysis
Quarter vs Previous Quarter (4QFY’21 vs 3QFY’21) analysis Variance RM mil 4QFY'21 3QFY'21 Q vs Previous Q PAT analysis : RM mil % Revenue 1 15,735.1 12,975.4 2,759.7 21.3 1 Higher revenue mainly due to Operating expenses (without depreciation) 2 (11,689.7) (8,198.1) (3,491.6) 42.6 higher ICPT under
Slide 17: Y-o-Y normalised EBITDA & PAT for FY'21
Y-o-Y normalised EBITDA & PAT for FY’21 1 MFRS 16 impact for FY’21 includes deferred tax. Please refer EBITDA FY'21 FY'20 MFRS16 impact slide for details. Components RM mil RM mil 2 Reported EBITDA 18,774.5 17,981.2 Higher Normalised EBITDA and PAT in FY’21 mainly due to: Impairment of investment in
Slide 18: Higher sales of electricity and contribution from subsidiaries
Higher sales of electricity and contribution from subsidiaries due to improved economic activities Variance Variance 1 4QFY'21 3QFY'21 FY'21 FY'20 4QFY’21 vs 3QFY’21 : Higher unit sold & sales of (4QFY'21 vs 3QFY'21) (FY'21 vs FY'20) electricity mainly from Industrial and Commercial UNITS SOLD GWh G
Slide 19: Other regulatory adjustment to be returned
As at FY’21, RM551.9mil of other regulatory adjustment to be returned mainly due to higher average selling price from price cap entity 1QFY’21 2QFY’21 3QFY’21 4QFY’21 FY’21 Components of Other Regulatory Adjustment (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) 1 Revenue Adjustment for Revenue Cap & P
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 TNB (Peninsula) Maximum Demand 5.9 5.0 4.7 4.3 4.2 Full Year FY’21 FY’20 Variance (%) 3.1 Maximum 3.2 18,585 18,808 -1.2 2.2 2.5 2.5 2.7 Demand (GWh) 1.2 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 -4.9 TNB (Peninsula) Y
Slide 21: Higher electricity demand driven by domestic sector
Higher Y-o-Y electricity demand continue to be driven by domestic sector Industrial Commercial FY’21 main contributors for the drop in 2.5% commercial sector: (3.7%) • Retails 7.5% 15.4% (11.1%) 1.0% • Educational (12.6%) 14.2% (16.4%) 4.4% • Accommodation Unit Sales (GWh) Growth 11,572 10,509 11,29
Slide 22: Higher operating expenses due to increase in fuel cost
Higher operating expenses due to increase in fuel cost Variance Variance 4QFY'21 3QFY'21 FY'21 FY'20 1 (4QFY'21 vs 3QFY'21) (FY'21 vs FY'20) Higher generation cost mainly due to higher fuel (RM mil) (RM mil) (RM mil) (RM mil) price adjustment (refer Coal Price Trending slide) RM mil % RM mil % Non-T
Slide 23: Higher Y-o-Y fuel cost due to soaring coal price
Higher Y-o-Y fuel cost mainly due to soaring coal price Table A – TNB & IPP Fuel Costs for Peninsula (RM mil) Table C – Fuel Costs Related Data Variance Fuel Type FY'21 FY'20 FY’21 FY’20 RM mil % Daily Average Piped Gas Volume (mmscfd) 800 712 Coal 14,995.8 9,075.2 5,920.6 65.2 1Q – 15.40 1Q - 26.86
Slide 24: Higher 4Q vs 3Q fuel cost from higher coal price
Higher 4Qvs3Q fuel cost from higher coal price Table A – TNB & IPP Fuel Costs for Peninsula (RM mil) Table C – Fuel Costs Related Data Variance 4Q vs 3Q 4QFY’21 3QFY’21 2QFY’21 1QFY’21 Fuel Type 4QFY'21 3QFY'21 2QFY'21 1QFY'21 RM mil % Daily Average Piped Gas Volume 866 731 817 722 (mmscfd) Coal 5,5
Slide 25: Higher units generated from gas in FY'21
Y-o-Y higher units generated from gas in FY’21 GENERATION MIX FOR INDUSTRY (%) 0.7 0.8 0.7 0.7 0.7 0.9 0.9 0.9 0.8 0.9 2.7 3.0 4.5 4.9 3.8 6.6 5.0 5.1 5.2 5.4 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.3 0.1 66.9 66.2 65.6 65.8 64.6 61.9 60.9 59.2 57.7 56.5 37.6 36.0 31.0 33.0 34.3 30.0 30.5 27.9 29.8 29.7 1
Slide 26: Fuel costs (TNB & IPPs – Peninsula)
Fuel costs (TNB & IPPs – Peninsula) Fuel Costs Units Generated Coal IPP, 21.3 Coal IPP, 22.5 Oil IPP, 0.0 Dist. TNB, 0.5 Dist. IPP, 0.3 Oil TNB, 0.0 Oil IPP, 0.1 Dist. IPP, 0.1 Oil TNB, 0.0 Hydro, 5.5 Dist. TNB, 0.0 Coal IPP, 24.2 Coal IPP, 26.1 Solar IPP, 0.8 Solar TNB, 0.0 Hydro, 3.8 Oil TNB, 0.0
Slide 27: TNB is neutral to volatility in fuel costs under ICPT
TNB is neutral to volatility in fuel costs covered under ICPT framework 1QFY' 21 2QFY' 21 3QFY' 21 4QFY' 21 FY' 21 (R M mn ) (R M mn ) (R M mn ) (R M mn ) (R M mn ) Reported Total Cost of Generation 4,199.9 5,033.5 6,107.3 8,438.1 23,778.8 (with MFRS16) Adjustment not related to IBR 902.1 830.9 756.
Slide 28: Net impact of MFRS 16 reduced group PAT
The net impact of MFRS 16 reduced the group PAT by RM620.8mil Net Impact of MFRS 16 (Y-o-Y) analysis FY'21 FY'20 Variance Remarks (RM mil) (RM mil) (RM mil) Decreasing EBITDA and PAT Capacity Payment 4,137.6 4,400.8 (263.2) in FY'21 Depreciation (3,473.4) (3,601.2) 127.8 Increasing PAT in FY'21 Fina
Slide 29: Group Capex
Group Capex RM mil 7,850.1 8,459.4 53.6 700.4 Major Generation Projects 1,425.4 Corporate & Subsidiaries 1,236.8 Recurring Distribution Network & Retail Recurring Transmission Recurring Generation 4,592.9 4,407.2 RP2 EXTENSION REGULATED ENTITIES CAPEX FY IBR Approved Actual YTD Utilization (RM mil)
Slide 30: Gearing stood at 47.0% in FY'21
Gearing stood at 47.0% in FY’21; capital headroom against internally observed 50% gearing level remains healthy 4% 5% Statistics 31st Dec'21 st 31 Dec'20 RM 5% 15% 5% Total Debt (RM' Bil) 51.7 49.5 USD 15% Net Debt (RM' Bil)* 42.5 36.0 Gearing (%) 47.0 46.3 JPY 75% Net Gearing (%) 38.6 33.7 GBP DEC’
Slide 31: Signs of recovery in trade debtors
Some signs of recovery in tandem with improvement in overall economy Trade Debtors Ageing (RM bil) Trade Debtors By Sectors Total 4.62 5.22 5.02 4.92 2% 1% 1% 2% Undue 0.02 0.02 0.01 35% 35% 37% 37% Current 0.01 Others 1.33 1.04 1.04 Domestic 1 Month 1.14 0.32 0.30 0.37 0.36 0.86 1.04 0.77 37% 37% 3
Slide 32: Generation Business performance
Generation Business performance REVENUE (RM mil) EBITDA (RM mil) PROFIT AFTER TAX (RM mil) 19,496.2 3,615.0 661.3 18.5% FY'21 FY'21 FY'21 EBITDA Margin 32
Slide 33: International business & assets performance
International business & assets performance as at Dec’21 Vantage RE EM: 78% Shuaibah EM: 80% E B I T DA ( m i l ) E B I T DA ( m i l ) 1 47.38 50.16 68.97 964.78 999.89 61.12 257.27 266.64 GBP USD SAR USD FY'20 FY'21 FY'20 FY'21 • Higher EBITDA YoY due to Vantage Solar’s performance contributed by h
Slide 34: International business & assets performance
International business & assets performance as at Dec’21 GAMA Enerji A.S. (GEAS) EM: 30% GMR Energy Limited (GEL) EM: 48% TNB Liberty Power Limited (LPL) EM: 51% E B I T DA ( m i l ) 1,2 E B I T DA ( m i l ) 1 E B I T DA ( m i l ) 9,309.65 7,491.84 1,039.88 696.60 119.62 4,436.33 99.97 5,965.59 81.3
Slide 35: Our RE journey is progressing well
Our RE journey is progressing well TNB RE Journey Renewable capacity (MW) 31% 8,300 15% 3,479 708 2,771 Note: • RE capacity includes large hydro • Gross RE Capacity RE Dec 2021 RE 2025 International Domestic % of TNB’s RE Recent RE Progress 1) Domestic renewables ▪ We have signed a 30-year power pur
Slide 36: Ensuring revenue from coal remains below 25%
Ensuring revenue from coal remains below 25%, towards longer-term aspiration Actual Group Revenue FY21 (%) 3 4 * RE Related to Energy Coal Others * 19 Transition (ET) * Others include revenue from regulated entities, subsidiaries and generation from gas 74 Long-term aspiration : ▪ No new coal plant
Slide 37: Coal price is on an increasing trend in FY2021
Coal price is on an increasing trend in FY2021 Coal Price Trending 723.7 520.5 517.9 458.1 422.6 428.4 395.8 362.7 376.6 361.4 361.2 347.7 337.5 411.1 379.8 347.0 363.4 359.9 375.3 291.9 289.3 325.0 361.7 352.0 321.6 254.1 254.6 331.3 340.5 237.4 327.9 320.3 281.1 248.6 301.9 249.0 216.6 294.9265.8
Slide 38: Industry coal requirement forecast for FY2022
Industry coal requirement forecast for FY2022 Average Coal Price (CIF) FY'14 FY'15 FY'16 FY'17 FY'18 FY’19 FY’20 FY’21 USD/metric tonne (MT) 75.4 66.0 55.7 72.7 95.9 79.3 60.6 116.2 RM/metric tonne (MT) 244.6 236.0 231.1 314.7 388.1 326.3 255.6 481.3 Coal Consumption Country Mix (mil MT) 2.4% 34.7 3
Slide 39: TNB market capitalisation of RM53.5bil
TNB market capitalisation of RM53.5bil as at 31st December 2021 Top 10 KLCI Stocks by Market Capitalisation Khazanah Nasional Berhad RM bil 18.4 16.2 98.6 Maybank +3.7% Permodalan Nasional Berhad 95.1 (PNB) 18.5 17.7 80.8 Public Bank +1.0% Employees Provident Fund 80.0 Board (EPF) 7.4 Petronas Chemi
Slide 40: Thank You
THANK YOU IR OFFICERS: CoE INVESTOR RELATIONS 1) Mehazatul Amali Meor Hassan GROUP FINANCE DIVISION • +603 2108 2126 • mehazatul@tnb.com.my Tenaga Nasional Berhad 4th Floor, TNB Headquarters 2) Sakinah Mohd Ali No.129, Jalan Bangsar, • +603 2108 2840 59200 Kuala Lumpur, MALAYSIA • sakinah.ali@tnb.co
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