Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — 2QFY2023 Earnings Presentation
46 slides from Tenaga Nasional Bhd's earnings presentation, Sep 4, 2023
Slide 1: Analyst Briefing 2QFY23
Analyst Briefing 2QFY23 4 September 2023 Tenaga Nasional Berhad 199001009294 (200866-W)
Slide 2: ICPT Updates
ICPT Updates Regulatory certainty; the Government has successfully managed the impact of fuel prices volatility for the past 18 ICPT cycles since 2015 RP1 RP2 RP2 Extension RP3 (2015 – 2017) (2018 – 2020) (Jan 2021 – Jan 2022) (Feb 2022 – 2024) ICPT Implementation (2015 - 2023) 16,158 9,527 7,000 1,
Slide 3: Energy Transition Plan: Three Strategic Focus Areas
Energy Transition Plan: Three (3) Strategic Focus Areas that consider both cross-sector and cross-border solutions Accelerate generation Develop flexible and Empower cross-sector A decarbonisation B cross-border grid C electrification and prosumers Decarbonise coal plants while ensuring Enhance Smar
Slide 4: Intensified efforts in executing Energy Transition Plan
Intensified efforts in executing Energy Transition Plan; demonstrating our strong commitments ‘Happy Deal’ 'Pakej RE expansion strategic RAHMAH’ supports ET objectives partnership by Allo ▪ Minister of NRECC commended TNB for its remarkable achievement in ▪ Launched Rahmah Package Internet plan, the
Slide 5: TNB's Green Lane Pathway for data centres
TNB’s Green Lane Pathway marks a remarkable milestone in Malaysia’s journey towards becoming a digital and manufacturing powerhouse in the region KEY PARTNERSHIPS Electricity Supply Agreements Memorandum of Understanding (ESA) (MoU) 1,500MW • Fast track green lane supply offerings for data centres t
Slide 6: Responsible energy transition via ASEAN collaborations
TNB has been pursuing our responsible energy transition agenda via collaborations with other ASEAN countries Boosting cross-border RE trade from Laos Existing and planned ASEAN Power Grid (APG) ▪ To form a Joint Collaboration Committee in exploring opportunities in the energy sector, with a focus on
Slide 7: Performance Updates
PERFORMANCE UPDATES
Slide 8: PAT impacted by negative fuel margin and forex volatility
Amid a challenging environment, our PAT was impacted by negative fuel margin and forex volatility REVENUE EBITDA PAT (RM mil) (RM mil) (RM mil) 1HFY2023 +3.8% 1HFY2023 1HFY2023 (9.7%) (32.4%) RM25,948.8 RM9,548.1 RM1,201.8 EBITDA MARGIN: 36.8% 1HFY2022:RM 24,990.8 1HFY2022: RM10,576.9 1HFY2022: RM1,
Slide 9: Group earnings supported by generation and network performance
Group earnings supported by; (i) Improved generation business (ii) World-class network performance 1HFY2023 Equivalent Plant Availability Factor, EAF 84.9% EAF performance secured generation assets’ (Generation) 1HFY2022: 82.5% capacity revenue % 2023 Target: 81.80% 1HFY2023 System Minutes (Transmis
Slide 10: Effective working capital management alleviates fuel price pressures
Effective working capital management alleviates pressures from high fuel prices; whilst improvement in collection strengthened cash flow position and gearing level Receivables (RM bil) 1 ICPT Cost • TNB will recover from the Government RM4.7 bil of ICPT cost Recovery for for July to December 2023 in
Slide 11: Dividends declared reflect prudent capital management
Dividends declared reflect prudent capital management while we continue to reward our shareholders Dividend Policy Dividend payout ratio of 30% to 60% based on the adjusted PATAMI Dividend Payout (%) (based on Adjusted 49.4 47.3 PATAMI) Interim Dividend Per Share (sen) 18.0 20.0 1HFY23 1HFY22 Divide
Slide 12: 2023 advancing towards Net Zero 2050
Year 2023 stands as a significant year as we advance towards achieving our Net Zero 2050 aspirations Latest demand growth is 1.7% Delivering Value to (120,933 GWh)* our Shareholders Electricity (IBR reference: 116,367 GWh) We will continue to honour our Demand dividend policy of 30% - 60% dividend p
Slide 13: Strategy Deployment
STRATEGY DEPLOYMENT
Slide 14: Transitioning into green entity with ~7,800MW pipeline
Energy Sources TNB transitioning into green entity with a strong ~7,800MW pipeline ready to be explored TNB pledge for no more coal plants. We will replace retiring coal plants with green pipeline projects. GenCo New Energy Division (NED) Electricity Export to Singapore 100MW TNB Bukit Selambau Sola
Slide 15: Championing green capacity growth through hybrid hydro-solar
Energy Sources Championing green capacity growth through first hybrid hydro-solar project; expediting the Malaysia’s Energy Transition journey Pilot Projects Floating Solar in Manjung Offshore floating solar plant Hybrid Hydro-Floating Solar PV (HHFS) ▪ A mini operational floating solar asset in ▪ T
Slide 16: Partnerships for ammonia and hydrogen studies
Energy Sources Establishing partnerships to unlock inventive solutions and sustainable approaches to accelerate our business growth Ammonia and Hydrogen Studies Co-Firing Ammonia in Coal Fired Boiler To complete Front End Engineering Design (FEED)* basic design for small scale co-firing by 2023 in J
Slide 17: 12-month fast-track supply for data centres
Energy Vector 12-month fast-track supply propels Malaysia as a central Hub for regional data centres Data Centre Key Partnerships Green Lane Pathway An exclusive pathway and strategic offering Electricity Supply Agreements designed for Malaysia's data centre market Yellowwood Properties (ESA) SIPP P
Slide 18: GSPARX positioned to lead rooftop solar business
Energy Usage GSPARX is well positioned to lead rooftop solar business; bolstering TNB's revenue growth GSPARX Key Achievements Recent Government Announcements i. Relaxation of capacity limit for each household applying UNILIN • GSPARX has completed installing solar panels at Unilin's manufacturing p
Slide 19: Strengthening the nation's EV ecosystem
Energy Usage TNB is committed to strategically strengthen the nation’s EV ecosystem to alleviate range anxiety and promote the widespread adoption of EVs Electric Vehicle (EV) TNB to invest ~RM31 million in 2023 to spur the development of EV ecosystem and fleet electrification Key Achievements: • 3
Slide 20: Appendix
Appendix 1H FY2023 o Details on Financial Results o Generation Business Performance o International Business Performance o Shareholdings Analysis
Slide 21: Year-on-Year (Y-o-Y) analysis
Year-on-Year (Y-o-Y) analysis Variance RM mil 1HFY23 1HFY22 Y-o-Y analysis: RM mil % Revenue 1 25,948.8 24,990.8 958.0 3.8 Higher Group revenue driven by sales 1 Imbalance Cost Pass-Through (ICPT) 6,492.5 9,808.0 (3,315.5) (33.8) demand growth of 2.0% including the Operating expenses (without deprec
Slide 22: Quarter vs previous quarter analysis
Quarter vs previous quarter (2QFY23 vs 1QFY23) analysis Variance RM mil 2QFY23 1QFY23 RM mil % Q-o-PrevQ analysis: Revenue 1 13,323.2 12,625.6 697.6 5.5 Imbalance Cost Pass Through (ICPT) 2 2,860.2 3,632.3 (772.1) (21.3) 1 Higher revenue mainly due to Operating expenses (without depreciation) (11,59
Slide 23: Y-o-Y normalised EBITDA & PAT for 1HFY23
Y-o-Y normalised EBITDA & PAT for 1HFY23 EBITDA 1HFY23 1HFY22 1 MFRS16 impact: Components RM mil RM mil 1HFY23 1HFY22 Variance Reported EBITDA 9,548.1 10,576.9 (RM mil) (RM mil) (RM mil) MFRS16 impact 1 (2,130.1) (2,203.0) Capacity Payment 2,130.1 2,203.0 (72.9) Normalised EBITDA 7,418.0 8,373.9 Dep
Slide 24: Higher Y-o-Y sales of electricity for the Group
Higher Y-o-Y sales of electricity for the Group mainly driven by stronger economic growth and CEI UK acquisition Variance Variance 2QFY23 1QFY23 1HFY23 1HFY22 (2QFY23 vs 1QFY23) (1HFY23 vs 1HFY22) UNITS SOLD GWh GWh GWh % GWh GWh GWh % Sales of Electricity (GWh) 1 - TNB 31,153.3 29,113.2 1 2,040.1 7
Slide 25: Other regulatory adjustment of RM571.1 mil to be returned
As at 1HFY23, other regulatory adjustment of RM571.1 mil to be returned 1QFY23 2QFY23 1HFY23 1HFY22 Components of Other Regulatory Adjustment (RM mil) (RM mil) (RM mil) (RM mil) Revenue Adjustment for Revenue Cap & Price Cap (1.4) (418.1) 1 (419.5) (283.6) Refund Related to Regulated Business (71.1)
Slide 26: New peak demand recorded in 2QFY23
New peak demand recorded in 2QFY23 % GDP & TNB Demand Growth TNB (Peninsular) Yearly Peak Demand 8.7 Full Year 5.9 * MW 5.0 4.2 4.7 4.3 19,716 3.1 6.0 19,183 18,808 2.2 2.5 2.5 3.2 2.7 1.2 18,566 18,585 18,338 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 17,788 -4.9 17,790 Recorded on: -5.6 11 May’23 16,
Slide 27: Improved Y-o-Y electricity demand by sector
Improved Y-o-Y electricity demand mainly contributed by commercial and domestic sectors Industrial Commercial (3.8%) 6.7% 1HFY23 main contributors for the increase in (3.4%) (4.2%) commercial sector: 6.2% 7.1% • Retails, business services and accommodation services 11,268 10,882 11,363 10,882 10,699
Slide 28: Lower Y-o-Y operating expenses
Lower Y-o-Y operating expenses due to reduction in generation cost Variance Variance 2QFY23 1QFY23 1HFY23 1HFY22 (2QFY23 vs 1QFY23) (1HFY23 vs 1HFY22) (RM mil) (RM mil) RM mil % (RM mil) (RM mil) RM mil % Non-TNB IPPs Costs 4,001.0 3,708.3 292.7 7.9 7,709.3 7,564.3 145.0 1.9 Capacity Payment 14.9 (1
Slide 29: Lower overall fuel cost in 1HFY23
Lower overall fuel cost due to lower coal prices in 1HFY23, albeit higher gas cost Table A – TNB & IPP Fuel Costs for Peninsular (RM mil) Table C – Fuel Costs Related Data Fuel statistics 1HFY23 1HFY22 Variance Average Coal Price Delivered (USD/MT)(CIF) 156.4 198.0 Fuel Type 1HFY23 1HFY22 RM mil % A
Slide 30: Lower Q-o-Q fuel costs
Lower Q-o-Q fuel costs mainly due to lower coal price Table A – TNB & IPP Fuel Costs for Peninsular (RM mil) Table C – Fuel Costs Related Data Variance 2QFY23 vs 1QFY23 Fuel Type 2QFY23 1QFY23 Fuel statistics 2QFY23 1QFY23 RM mil % Average Coal Price Delivered (USD/MT)(CIF) 137.3 177.5 Coal 5,640.9
Slide 31: Higher generation from coal in 2QFY23
Higher generation from coal in 2QFY23 Generation Mix for Industry (%) 0.9 1.2 1.4 1.5 1.2 1.6 1.7 4.8 3.5 6.3 6.2 5.2 5.1 4.0 1.1 0.4 0.0 0.6 0.5 0.2 0.1 60.1 54.1 57.8 56.5 55.1 55.9 53.7 39.1 37.1 35.8 36.7 37.2 39.5 34.0 1QFY22 2QFY22 3QFY22 4QFY22 FY22 1QFY23 2QFY23 Gas Coal Oil & Distillate Hyd
Slide 32: Fuel Costs & Units Generated
Fuel Costs & Units Generated (TNB & IPPs – Peninsular) Fuel Costs Units Generated Distillate TNB, 0% Distillate TNB, 0% Distillate IPP, 1% LNG, 0% Distillate IPP, 0% Oil TNB, 0% Oil TNB, 0% Oil IPP, 0% Hydro, 5% Oil IPP, 0% Solar TNB, 0% Gas IPP, 13% Solar IPP, 2% Distillate TNB, 0% Distillate IPP,
Slide 33: TNB is neutral to volatility in fuel costs under ICPT
TNB is neutral to volatility in fuel costs under the ICPT framework 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) Reported Total Cost of Generation 11,634.6 11,029.5 12,052.8 9,199.4 9,068.1 (with MFRS16) Adjustment not related to IBR 948.3 840.2 * 307.2 726.3 752.4
Slide 34: Illustration for Generators' Fuel Margin
Illustration for Generators’ Fuel Margin: Coal Price Trending Applicable Coal Price (ACP) vs Moving Average Price (MAP) 1,100.00 1,040.10 1,023.80 1,000.00 960.40 1,022.32 FY2022 FY2023 1,028.10 900.00 850.94 800.00 1,022.3 1,040.1 779.40 696.30 700.00 626.40 623.10 (RM565.7 mil) 600.00 557.21 600.6
Slide 35: Industry coal requirement forecast for FY2023
Industry coal requirement forecast for FY2023 Coal Consumption (mil MT) Source Country Mix 3.0% 34.7 8.0% 30.8 32.3 31.9 31.6 27.4 28.8 25.4 17.0% 22.2 19.3 72.0% * FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 (F) Indonesia Australia * Based on tonnage planned for delivery in FY2023 Russia Sout
Slide 36: Group CAPEX, Regulated CAPEX and RAB
Group CAPEX Regulated CAPEX and Regulated Asset Base (RAB) RM mil 3,663.3 3,326.3 385.1 453.0 RP3 REGULATED ENTITIES CAPEX FY IBR Approved Actual YTD Utilisation 798.3 693.1 (RM mil) (RM mil) (%) 2023 6,973.1 2,830.1 40.6% 2,059.4 1,880.5 Total RAB (RM mil) Actual Approved As at 30 June 2023 FY2023
Slide 37: Gearing improved to 50.2% as at 1HFY23
Gearing improved to 50.2% as at 1HFY23 Statistics 30 Jun 2023 31 Dec 2022 Loan Breakdown Total Debt (RM bil) 61.1 63.9 RM3.7 bil RM RM1.7 bil Net Debt (RM bil)* 43.8 50.8 6% USD 3% JPY Gearing (%) 50.2 51.2 RM9.0 bil 3% 5% 15% GBP 13% RM8.5 bil Net Gearing (%) 36.0 40.7 RM3.2 bil RM1.8 bil 76% RM46.
Slide 38: Trade debtors ageing as at 1HFY23
Trade debtors ageing as at 1HFY23 Trade Debtors Ageing (RM bil) Trade Receivables By Sectors (RM bil) 5.31 5.26 5.10 5.18 5.63 5.31 5.26 5.10 5.18 5.63 Total 0.02 2% 2% 1% 1% 2% 0.02 0.02 0.00 0.01 Undue 34% 34% 33% 1.52 35% 35% Others 1.28 1.23 1.13 1.18 Current 0.31 0.30 0.27 0.35 0.32 Domestic 1
Slide 39: Domestic generation business performance
Domestic generation business performance RM mil REVENUE EBIT PROFIT AFTER TAX 14,060.0 12,705.9 EBIT without 974.3 1,344.6 fuel margin 1,601.6 806.6 408.6 1HFY23 1HFY22 1HFY23 1HFY22 (193.8) 1HFY23 1HFY22 Higher revenue mainly due to higher energy Lower EBIT and PAT due to: payment resulted from hig
Slide 40: Our RE journey is progressing well
Our RE journey is progressing well TNB RE Journey Renewable capacity (MW) % RE in TNB’s portfolio 17% 17% 15% International 3,987 3,889 3,487 Domestic 993 993 716 Note: 2,994 2,896 2,771 • RE capacity includes large hydro • Gross RE Capacity • Solar capacity is quoted in MWp starting from 2QFY23 RE
Slide 41: International Business - Vantage RE Performance
International Business - Core/Renewable Energy (RE) Assets Performance as at June 2023 Vantage RE EM: 79% EBITDA (mil) 64.4 34.7 52.1 45.2 GBP USD 2QFY22 2QFY23 • Higher Y-o-Y EBITDA due to additional contribution from wind portfolio (97.3MW) and higher locked-in PPA prices in 2QFY23. • Total cash d
Slide 42: International Business - Shuaibah, GEAS, GEL Performance
International Business - Core/Renewable Energy (RE) Assets Performance as at June 2023 Shuaibah EM: 69% GAMA Enerji A.S. (GEAS) EM: 13% GMR Energy Limited (GEL) EM: 33% E B I T DA ( m i l ) E B I T DA ( m i l ) 1 9,440.0 8,550.0 E B I T DA ( m i l ) 1 514.9 254.7 137.3 67.9 1,689.0 956.3 1,100.0 900
Slide 43: Higher TNB coal contribution for 1HFY23
Higher TNB coal contribution for 1HFY23 due to higher demand • % Actual Group revenue: 27% (1HFY22: 20%) • % Units generated: 39% (1HFY22: 34%); lower coal IPP dispatch due to unavailability Actual Group Revenue* Units Generated Distillate TNB, 0% Distillate IPP, 0% Oil TNB, 0% Oil IPP, 0% 27% Hydro
Slide 44: Shareholdings
Shareholdings Khazanah Nasional Berhad 16.1 18.3 Permodalan Nasional Berhad (PNB) 18.3 15.8 Employees Provident Fund 7.4 Board (EPF) 7.3 3.0 Kumpulan Wang Persaraan (KWAP) (%) 1.5 Other Government Agencies 25.5 18.5 23.6 Local Corporation & Retail 13.1 19.2 Foreign Shareholding 12.5 Pacific, Africa,
Slide 45: 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 46: Investor Relations
INVESTOR RELATIONS IR OFFICERS: GROUP FINANCE DIVISION Sarah Keok Tenaga Nasional Berhad +603 2108 2126 | sarahk@tnb.com.my Level 12, Tower A, TNB Platinum No. 3, Jalan Bukit Pantai, Bangsar 59100 Kuala Lumpur Sakinah Mohd Ali +603 2108 2840 | sakinah.ali@tnb.com.my Tel : +603 2108 2128 Fax : +603 2
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