Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — Q3 FY2021 Earnings Presentation
38 slides from Tenaga Nasional Bhd's earnings presentation, Nov 26, 2021
Slide 1: 3Q 2021 Presentation to Analysts
3Q 2 0 2 1 Presentation to Analysts Unaudited Consolidated Result for the 3rd Quarter FY2021 Ended 30th September 2021 26th November 2021
Slide 2: Key highlights of the period
Key highlights of the period Financial Technical Sustainability Regulated & performance performance pathway non-reg performance Resilient nine Acceleration in RE months 2021 Stable regulated capacity through local financial results, earnings World class & international however challenges operational
Slide 3: Resilient 9MFY'21 financial performance amid improved economic activities
Resilient 9MFY’21 financial performance amid improved economic activities, however challenges persist REVENUE EBITDA PROFIT AFTER TAX BALANCE SHEET Electricity revenue grew by 1.1% year-on-year Includes higher Group electricity Strong and resilient Balance Sheet Subsidiaries performance improved as
Slide 4: Maintaining world class operational network performance despite challenging period
Maintaining world class operational network performance despite 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 Sy
Slide 5: Sustainability pathway: new growth opportunities, Net Zero by 2050
We believe our sustainability pathway will open up new growth opportunities whilst remaining true to our core role Aspire to achieve Net Zero emissions by 2050 Our 8,300 MW RE Target by 2025 – Build scale in renewable generation Our Commitment to 2035 - Emission intensity reduction by 35% through si
Slide 6: Our sustainability pathway towards 2050 is supported by three strategic pillars
Our sustainability pathway towards 2050 is supported by the three strategic pillars TNB’s Sustainability Pathway 2050 Targets Aspire to achieve Net Zero by 2050, Aspire to achieve Zero 1% of profit-after-tax (PAT) towards 35% emission intensity reduction Fatalities and LTIF < 1.0 environmental and c
Slide 7: IBR framework delivers stable earnings for regulated entities
IBR framework delivers stable earnings for our regulated entities while regulated CAPEX remains on track Regulated Earnings (RM mil) Towards becoming a TNB Smart Grid Index (SGI) Smart Utility by 2025 target by 2025 : 85%* On-going Projects under RP2 extension 4,209.1 3,706.6 ❑ Smart meter program e
Slide 8: Efforts to improve non-regulated business continue, in particular International Business
Efforts to improve non-regulated business continues, in particular International Business Positive EBITDA for all international portfolios despite challenging environment New Energy Division established to advance EBITDA (mil) international business commitments on: 100% stake in VANTAGE RE 30% stake
Slide 9: Forward guidance
Forward guidance Electricity Demand RP3 Forecasted at 2.9%, in line with GDP projection of 3.0% Final stage discussion to 4.0% for 2021 with Energy Commission Reached maximum demand: 18,585MW (Oct’21) Non-Regulated Business Sustainability Pathway Dividend • 5 low carbon ventures MOUs signed Continuo
Slide 10: THANK YOU
| THANKYOU |
Slide 11: Appendix 3Q FY 2021
Appendix 3Q FY 2021 o Details on Financial Results o GenCo Performance o International Business Performance o Coal Data o Shareholdings Analysis 11
Slide 12: Key highlights of the period
Key highlights of the period 01 Resilient nine months financial performance, however challenges persist 02 Robust technical performance • Reported profit for the 9MFY2021 of RM2.9bil, compared with RM2.4bil for 9MFY2020. • Maintained world class achievement on our • Electricity revenue grew by 1.1%
Slide 13: Year-on-year (Y-o-Y) analysis
Year-on-year (Y-o-Y) analysis Y-o-Y PAT analysis : Variance 1 Higher revenue due to ICPT under RM mil 9MFY'21 9MFY'20 recovery and higher sales of RM mil % Revenue 36,894.4 33,651.7 3,242.7 9.6 electricity 1 Operating expenses (without depreciation) (22,143.2) (20,377.0) (1,766.2) 8.7 Net loss on im
Slide 14: Quarter vs Previous Quarter (3QFY'21 vs 2QFY'21) analysis
Quarter vs Previous Quarter (3QFY’21 vs 2QFY’21) analysis Variance RM mil 3QFY'21 2QFY'21 Q vs Previous Q PAT analysis : RM mil % Revenue 1 12,975.4 12,441.0 534.4 4.3 1 Higher revenue mainly due to Operating expenses (without depreciation) 2 (8,198.1) (7,445.6) (752.5) 10.1 higher ICPT under recove
Slide 15: Y-o-Y normalised EBITDA & PAT for 9MFY'21
Y-o-Y normalised EBITDA & PAT for 9MFY’21 EBITDA 9MFY'21 9MFY'20 1 MFRS 16 impact for 9MFY’21 includes deferred tax. Please refer Components RM mil RM mil MFRS16 impact slide for details. Reported EBITDA 14,392.7 13,765.2 2 Impairment of investment in GMR 276.4 51.6 Higher Normalised EBITDA and PAT
Slide 16: Higher y-o-y sales of electricity due to improved economic activities
Higher y-o-y sales of electricity due to improved economic activities while quarter vs previous quarter impacted by MCO 3.0 imposition Variance Variance 3QFY'21 2QFY'21 9MFY'21 9MFY'20 1 (3QFY'21 vs 2QFY'21) (9MFY'21 vs 9MFY'20) 3QFY’21 vs 2QFY’21 : Lower unit sold & sales of UNITS SOLD GWh GWh GWh
Slide 17: Other regulatory adjustment to be returned as at 9MFY'21
As at 9MFY’21, RM265.9mil of other regulatory adjustment to be returned mainly due to higher average selling price from price cap entity 1QFY’21 2QFY’21 3QFY’21 9MFY’21 Components of Other Regulatory Adjustment (RM mil) (RM mil) (RM mil) (RM mil) 1 Revenue Adjustment for Revenue Cap & Price Cap (10.
Slide 18: 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 Year-on-Year 5.0 4.7 4.2 4.3 9MFY’21 9MFY’20 Variance (%) 3.0 Maximum 2.2 2.5 2.5 3.2 2.7 18,366 18,808 -2.4 0.6 Demand (GWh) -4.9 -5.6 TNB (Peninsula) Yearly Peak Demand FY'15 FY'16
Slide 19: Higher Y-o-Y electricity demand from improved industrial sector
Higher Y-o-Y electricity demand from improved industrial due to resumption of business operation Industrial Commercial 9MFY’21 main contributors for the drop 3.0% in commercial sector: (6.4%) • Retails 0.2% 7.5% 15.4% (11.1%) • Accommodation (10.7%) (12.6%) 14.2% (16.4%) • Educational Unit Sales (GW
Slide 20: Higher operating expenses due to increase in fuel cost
Higher operating expenses due to increase in fuel cost 1 Variance Variance Higher generation cost mainly due to higher fuel 3QFY'21 2QFY'21 9MFY'21 9MFY'20 (3QFY'21 vs 2QFY'21) (9MFY'21 vs 9MFY'20) price adjustment (refer Coal Price Trending slide) (RM mil) (RM mil) (RM mil) (RM mil) RM mil % RM mil
Slide 21: Higher Y-o-Y fuel cost mainly 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 9MFY’21 9MFY’20 Fuel Type 9MFY'21 9MFY'20 Daily Average Piped Gas Volume (mmscfd) 778 698 RM mil % Coal 9,485.8 7,028.0 2,457.8 35.0 1Q – 15.40 1Q
Slide 22: Higher 3Q vs 2Q fuel cost from higher coal price
Higher 3Qvs2Q fuel cost from higher coal price Table A – TNB & IPP Fuel Costs for Peninsula (RM mil) Table C – Fuel Costs Related Data Variance 3Q vs 2Q Fuel Type 3QFY'21 2QFY'21 1QFY'21 3QFY’21 2QFY’21 1QFY’21 RM mil % Daily Average Piped Gas Volume 731 817 722 Coal 3,922.4 2,938.6 2,624.8 983.8 33
Slide 23: Higher units generated from coal in 3QFY'21
Higher units generated from coal in 3QFY’21 GENERATION MIX FOR INDUSTRY (%) 0.7 0.8 0.7 0.7 0.7 0.9 0.9 0.9 2.7 3.0 4.5 4.9 3.8 6.6 5.0 5.1 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 66.9 66.2 65.6 65.8 64.6 61.9 60.9 56.5 37.6 31.0 33.0 30.0 30.5 27.9 29.8 29.7 1QFY'20 2QFY'20 3QFY'20 4QFY'20 FY'20 1QFY'21 2Q
Slide 24: Fuel costs (TNB & IPPs – Peninsula)
Fuel costs (TNB & IPPs – Peninsula) Fuel Costs Units Generated Coal IPP Oil IPP 0.0% Coal IPP Dist. TNB 0.3% 23.1% 21.6% Dist. IPP 0.0% Oil TNB 0.0% Oil IPP 0.0% Dist. IPP 0.1% Hydro Oil TNB 0.0% Dist. TNB 0.0% Coal IPP 5.5% Coal IPP Solar IPP 0.8% 25.8% Solar TNB 0.1% 23.1% Hydro 3.4% Oil IPP 0.0%
Slide 25: TNB is neutral to volatility in fuel costs covered under ICPT framework
TNB is neutral to volatility in fuel costs covered under ICPT framework 3QFY’ 20 4QFY’ 20 1QFY' 21 2QFY' 21 3QFY' 21 (R M mil) (R M mil) (R M mn ) (R M mn ) (R M mn ) Reported Total Cost of Generation 4,404.5 3,745.9 4,199.9 5,033.5 6,107.3 (with MFRS16) Adjustment not related to IBR 989.5 993.4 902
Slide 26: The net impact of MFRS 16 reduced the group PAT
The net impact of MFRS 16 reduced the group PAT by RM434.2mil Net Impact of MFRS 16 (Y-o-Y) analysis 9MFY'21 9MFY'20 Variance Remarks (RM mil) (RM mil) (RM mil) Decreasing EBITDA and PAT Capacity Payment 3,149.2 3,329.9 (180.7) in 9MFY'21 Depreciation (2,607.0) (2,721.1) 114.1 Increasing PAT in 9MFY
Slide 27: Group Capex
Group Capex RM mil 4,922.5 5,326.2 34.5 489.3 687.0 585.2 Major Generation Projects Corporate & Subsidiaries Recurring Distribution Network & Retail 3,243.5 2,622.1 Recurring Transmission Recurring Generation 2021 CAPEX Outlook RM9.5 bil 975.2 1,274.8 • Regulated Recurring : RM7.3bil • Others : RM2.
Slide 28: Gearing stood at 46.3% in 9MFY'21
Gearing stood at 46.3% in 9MFY’21; capital headroom against internally observed 50% gearing level remains healthy th st 4% 5% Statistics 30 Sep'21 31 Dec'20 RM 5% Total Debt (RM' Bil) 49.1 49.5 17% 5% USD Net Debt (RM' Bil)* 37.5 36.0 15% Gearing (%) 46.3 46.3 JPY 75% Net Gearing (%) 35.4 33.7 GBP F
Slide 29: Some signs of recovery in tandem with improvement in overall economy
Some signs of recovery in tandem with improvement in overall economy Trade Debtors Ageing (RM bil) Trade Debtors By Sectors Total 4.41 4.62 5.22 5.02 2% 2% 2% 1% Undue 0.02 0.02 33% 35% 35% 37% Current 0.02 0.01 Others 1.33 1.04 Domestic 1 Month 1.04 1.14 0.32 0.37 0.28 0.36 0.86 1.04 38% 37% 37% 36
Slide 30: 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) 14,925.0 2,977.1 750.9 19.9% 9MFY'21 9MFY'21 9MFY'21 EBITDA Margin 9MFY’21 PAT was mainly contributed by the increase in hydro generation during monsoon season which has resulted to a hig
Slide 31: International business & assets performance as at Sep'21
International business & assets performance as at Sep’21 Vantage Solar UK Limited (VSUK) EM: 86% Tenaga Wind Ventures (TWV) EM: 69% Shuaibah EM: 81% E B I T DA ( m i l ) E B I T DA ( m i l ) E B I T DA ( m i l ) 34.59 47.87 781.24 767.26 28.05 35.92 16.05 11.66 12.53 8.43 208.33 204.60 GBP USD GBP U
Slide 32: International business & assets performance as at Sep'21
International business & assets performance as at Sep’21 GAMA Enerji A.S. (GEAS) EM: 30% GMR Energy Limited (GEL) EM: 24% EM: 26% TNB Liberty Power Limited (LPL) 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 ) 2,905.80 664.53 5,143.85 2,429.41 426.47 81.83 2,595.80 70.47 35.27 1
Slide 33: Our RE journey is progressing well
Our RE journey is progressing well TNB RE Journey 8,300 1,800 RE Capacity (MW) 2,733 3,421 346 667 2,754 RE SEP 2021 Domestic International International RE 2025 (2021 - 2025) Ambition 1 Ambition 2 (2021 - 2025) (2021 - 2025) Recent RE Progress International Domestic 1) Domestic renewables ▪ We have
Slide 34: Ensuring revenue from coal remains below 25%
Ensuring revenue from coal remains below 25%, towards longer-term aspiration Actual Group Revenue 9MFY21 (%) 4 4 * RE Related to Energy Coal Others * 19 Transition (ET) * Others include revenue from regulated entities, subsidiaries and generation from gas 73 Long-term aspiration : ▪ No new coal plan
Slide 35: Coal price is on an increasing trend in FY2021
Coal price is on an increasing trend in FY2021 Coal Price Trending 520.5 458.1 422.6 428.4 395.8 362.7 376.6 361.4 411.1 361.2 379.8 347.7 337.5 375.3 347.0 363.4 361.7 352.0 359.9 340.5 321.6 325.0 331.3 327.9 291.9 289.3 320.3 256.2 254.1 254.6 301.9 281.1 243.2 294.9 233.0 230.2 236.2 236.5 248.2
Slide 36: 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 9MFY’21 USD/metric tonne (MT) 75.4 66.0 55.7 72.7 95.9 79.3 60.6 97.8 RM/metric tonne (MT) 244.6 236.0 231.1 314.7 388.1 326.3 255.6 403.5 Coal Consumption Country Mix (mil MT) 1.0% 34.7 35.6 14.0%
Slide 37: TNB market capitalisation of RM55.4bil as at 30th September 2021
TNB market capitalisation of RM55.4bil as at 30th September 2021 Top 10 KLCI Stocks by Market Capitalisation Khazanah Nasional Berhad RM bil 18.4 16.9 94.1 Maybank (1.0%) Permodalan Nasional Berhad 95.1 (PNB) 18.5 17.7 79.0 Public Bank (1.2%) Employees Provident Fund 80.0 Board (EPF) 7.4 69.6 7.3 Pe
Slide 38: THANK YOU
THANK YOU CoE INVESTOR RELATIONS IR OFFICERS: GROUP FINANCE DIVISION 1) Mehazatul Amali Meor Hassan Tenaga Nasional Berhad • +603 2108 2126 4th Floor, TNB Headquarters • mehazatul@tnb.com.my No.129, Jalan Bangsar, 59200 Kuala Lumpur, MALAYSIA 2) Sakinah Mohd Ali Tel : +603 2108 2128 • +603 2108 2840
Tenaga Nasional Berhad — Q3 FY2021 Earnings Presentation on 6ix