Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — Q1 FY2022 Earnings Presentation
40 slides from Tenaga Nasional Bhd's earnings presentation, Jun 1, 2022
Slide 1: Presentation to Analysts: 1Q FY2022 Unaudited Consolidated Results
1Q 2 0 2 2 Presentation to Analysts Unaudited Consolidated Result for the 1st Quarter FY2022 Ended 31st March 2022 1ST JUNE 2022 1
Slide 2: Key highlights; delivering on our objectives
Key highlights; delivering on our objectives in order to grow, decarbonise & deliver sustainable shareholder returns Resilient 1QFY2022 financial performance, 1 electricity demand grew by 4.0% year-on-year Balance sheet position remains strong 2 World class operational network performance Sustainabi
Slide 3: Resilient 1QFY2022 financial performance on higher electricity demand
Resilient 1QFY2022 financial performance on the back of higher electricity demand by 4% 1 year-on-year inline with Malaysia’s transition to endemic phase REVENUE EBITDA PROFIT AFTER TAX • Peninsular Malaysia electricity demand grew by 4% • Includes higher Group electricity revenue, • Includes higher
Slide 4: Solid technical operation maintaining world-class standards
Supporting our financial performance is a solid technical operation, maintaining world- 2 class standards despite the challenging operating environment Equivalent Plant System Minutes SAIDI Availability Factor (EAF*) (Transmission) (Distribution Network) (Generation) % Minutes Minutes 55.00 2.00 83.
Slide 5: Regulatory certainty; framework continuously upheld
Regulatory certainty; Framework continuously being upheld ensuring sustainable regulated returns • The Government has continuously upheld the framework and the ICPT mechanisms has successfully managed the volatility in fuel prices through tariff pass through to the consumers. • Since RP1, RM8.6 bill
Slide 6: Bold sustainability pathway: halve coal capacity, net zero by 2050
In addition to financial and technical performance, we recognise the need to make our core sustainable 3 and build new sustainable businesses through our bold sustainability pathway. We commit to halve coal capacity and reduce 35% emission intensity by 2035, while longer term aspiration is to be net
Slide 7: Genco's decarbonisation plan and achievements
To achieve this, Genco’s own decarbonisation efforts are crucial. Genco is committed in supporting TNB’s SP2050 via (1) increase renewable portfolio, (2) repowering coal into cleaner alternatives, while progressively (3) applying new emerging technologies to reduce carbon emissions TNB GenCo’s decar
Slide 8: Expanding RE footprint globally through NED
Through NED, we strive to future proof our business by expanding our RE footprint globally through M&A, asset development and establishing strategic partnerships with leading RE players RE growth strategy Asset development • Move upstream into greenfield development for GLOBAL RE FOOTPRINT return en
Slide 9: Traction in growing RE assets in the UK through Vantage
We have gained encouraging traction in growing RE assets in the UK through our Vantage UK RE Assets In October 2021, completed an acquisition of a 49% stake in Blyth Offshore Demonstrator Limited (“BODL”) with installed capacity of 41.5MW (“Blyth 1”) and development rights for an innovative floating
Slide 10: Continued investment in network and smart grid
Despite our world-class network performance, we continue to invest in our network, in particular to improve its reliability through the adoption of the smart grid. In addition, our network plays a key role in enabling the nation’s energy transition, therefore continuous planning and development is c
Slide 11: Leading Malaysia's transition into low-carbon mobility
We are strategically positioned to lead Malaysia’s transition into low-carbon mobility across the value chain as infra, charge point operator and digital platform provider 2030 Proposed Target for Malaysia EV Electron station: The future of ‘fuelling’ 500k 18k ❑ TNB will open an electric vehicle cha
Slide 12: Growing solar solutions through GSPARX
Further future-proofing our business is growing solar solutions through GSPARX, having grown at 67% CAGR since 2019 ❑ GSPARX focuses on solar solutions which allows customers (residential, commercial and industrial) to install solar PV at zero upfront cost and enjoy savings via self-consumption. ❑ O
Slide 13: Green and digital offerings for retail customers
Beyond kWh, our sustainability agenda extends to our retail customers through green and digital offerings • Aims to further widen our fibre coverage throughout the Peninsular Malaysia. By 2026, Allo is projected to generate revenue of RM500mil and EBIT of RM200mil. Enable electricity consumers to in
Slide 14: Forward Guidance for FY2022
Forward Guidance for FY2022 ELECTRICITY DEMAND GROUP CAPEX FORECAST Total Group CAPEX: Forecasted at 1.7% @ 115,835GWh, RM11.8bil in line with GDP projection of 5.3% to 6.3% ❖ Regulated capex: RM7.2bil for 2022 ❖ Others*: RM4.6bil * Major projects, subsidiaries and corporate DIVIDEND TNB SUSTAINABIL
Slide 15: Appendix 1Q FY2022
APPENDIX 1Q FY 2022 o Details on Financial Results o GenCo Performance o International Business Performance o Coal Data o Shareholdings Analysis
Slide 16: Year-on-year (Y-o-Y) analysis
Year-on-year (Y-o-Y) analysis Variance RM mil 1QFY'22 1QFY'21 Y-o-Y analysis : RM mil % Higher revenue mainly due to ICPT Revenue 1 15,658.5 11,478.0 4,180.5 36.4 1 surcharge of RM3,505.4mil Operating expenses (without depreciation) 2 (10,663.6) (6,499.5) (4,164.1) 64.1 (1QFY’21 rebate of RM327.3mil
Slide 17: Quarter vs previous quarter analysis
Quarter vs previous quarter (1QFY’22 vs 4QFY’21) analysis Variance RM mil 1QFY'22 4QFY'21 Q vs prev. Q analysis : RM mil % Revenue 1 15,658.5 15,735.1 (76.6) (0.5) 1 Lower revenue mainly due to Operating expenses (without depreciation) 2 (10,663.6) (11,689.7) 1,026.1 (8.8) Lower sales of electricity
Slide 18: Y-o-Y normalised EBITDA & PAT for 1QFY'22
Y-o-Y normalised EBITDA & PAT for 1QFY’22 EBITDA 1QFY'22 1QFY'21 Components RM mil RM mil 1 MFRS 16 impact for 1QFY’22 includes deferred tax. Please refer Reported EBITDA 5,137.8 4,974.8 MFRS16 impact slide for details. Impairment - 336.8 2 Additional ADD for TNB* 39.3 71.4 Lower Normalised PAT in 1
Slide 19: Higher Y-o-Y sales of electricity and subsidiary contribution
Higher Y-o-Y sales of electricity and contribution from subsidiaries due to less business restriction Variance Variance 1 1QFY'22 4QFY'21 1QFY'22 1QFY'21 1QFY’22 vs 4QFY’21 : Lower unit sold & sales of (1QFY'22 vs 4QFY'21) (1QFY'22 vs 1QFY'21) electricity mainly from Industrial sector UNITS SOLD GWh
Slide 20: Other regulatory adjustment to be returned
As at 1QFY’22, RM44.2mil of other regulatory adjustment to be returned mainly due to higher average selling price from price cap entity 1QFY’22 Components of Other Regulatory Adjustment (RM mil) 1 Revenue Adjustment for Revenue Cap & Price Cap (44.2) Refund Related to Regulated Business (113.1) Regu
Slide 21: 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 4.7 4.3 TNB (Peninsula) Yearly Peak Demand 4.2 Full Year 3.1 * MW 2.5 2.5 3.2 2.7 18,840 2.2 18,808 1.2 18,566 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 18,338 -4.9 18,585 17,788 17,790 Recorded at: -5.6 16,901
Slide 22: Higher Y-o-Y electricity demand driven by commercial and domestic sectors
Higher Y-o-Y electricity demand driven by commercial and domestic sectors Industrial Commercial 1QFY’22 main contributors for the drop (0.2%) in industrial sector: 10.2% • Chemical 15.4% (11.1%) 1.0% (0.2%) • Rubber products 10.2% 14.2% (16.4%) 4.4% • Metal products Unit Sales (GWh) Growth 11,478 10
Slide 23: Higher Y-o-Y operating expenses due to generation cost
Higher Y-o-Y operating expenses due to increase in generation cost Variance Variance 1QFY'22 4QFY'21 1QFY'22 1QFY'21 (1QFY'22 vs 4QFY'21) (1QFY'22 vs 1QFY'21) (Rm mil) (RM mil) (RM mil) (RM mil) 1 RM mil % RM mil % 1QFY’22 vs 4QFY’21: Lower generation cost due to lower coal prices (USD165.5/MT vs US
Slide 24: Higher Y-o-Y fuel cost 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 Fuel Type 1QFY'22 1QFY'21 1QFY’22 1QFY’21 RM mil % Daily Average Piped Gas Volume (mmscfd) 713 722 Coal 4,981.8 2,624.8 2,357.0 89.8 Tier 1 : 30.0
Slide 25: Higher units generated from gas in 1QFY'22
Higher units generated from gas in 1QFY’22 GENERATION MIX FOR INDUSTRY (%) 0.9 0.9 0.9 0.8 0.9 0.9 6.6 5.0 5.1 5.2 5.4 4.8 0.1 0.0 0.1 0.3 0.1 1.1 61.9 60.9 59.2 57.7 56.5 54.1 37.6 36.0 39.1 33.0 34.3 30.5 1QFY'21 2QFY'21 3QFY'21 4QFY'21 FY'21 1QFY'22 Gas Coal Oil & Distillate Hydro Solar 25 25
Slide 26: Fuel costs (TNB & IPPs – Peninsula)
Fuel costs (TNB & IPPs – Peninsula) Fuel Costs Units Generated Oil IPP, 0 Oil TNB, 0 Coal IPP, 19.9 Dist. IPP, 1.1 Coal IPP, 9.6 Dist. TNB, 0 Oil IPP, 0.0 Solar TNB, 0.1 Dist. TNB, 3.3 Oil TNB, 0.0 Hydro, 4.8 Coal IPP, 21.6 Dist. IPP, 1.2 Coal IPP, 24.0 Solar IPP, 0.9 Hydro, 6.6 Dist. IPP, 0.1 Dist.
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 1QFY' 22 (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 8,367.1 (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 RM249.6mil Net Impact of MFRS 16 (Y-o-Y) analysis 1QFY'22 1QFY'21 Variance Remarks (RM mil) (RM mil) (RM mil) Increasing EBITDA and PAT Capacity Payment 1,073.4 1,063.7 9.7 in FY'21 Depreciation (955.3) (877.7) (77.6) Decreasing PAT in FY'21 Finance
Slide 29: Group Capex
Group Capex RM mil 1,800.0 1,489.2 21.6 8.6 Major Generation Projects 160.3 204.4 Corporate & Subsidiaries Recurring Distribution Network & Retail Recurring Transmission 1,029.8 Recurring Generation 868.5 RP3 REGULATED ENTITIES CAPEX FY IBR Approved Actual YTD Utilization 582.6 282.8 (RM mil) (RM mi
Slide 30: Gearing stood at 47.8% in 1QFY'22
Gearing stood at 47.8% in 1QFY’22; capital headroom against internally observed 50% gearing level remains healthy 4% 4% 15% 4%5% RM Statistics 31st Mar'22 31st Dec'21 15% USD Total Debt (RM' Bil) 53.4 51.7 Net Debt (RM' Bil)* 44.4 42.5 JPY DEC’21 76% Gearing (%) 47.8 47.0 GBP 77% Net Gearing (%) 39.
Slide 31: 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 5.22 5.02 4.92 5.17 2% 1% 1% 1% Undue 0.02 0.02 0.01 0.01 35% 37% 37% 36% Current Others 1.33 1.04 1.04 1.17 1 Month Domestic 0.37 0.32 0.30 0.39 0.8
Slide 32: Generation business performance
Generation business performance REVENUE (RM mil) EBIT (RM mil) PROFIT AFTER TAX (RM mil) 6,256.0 19.4% 13.8% 4,656.9 931.5 886.9 519.8 492.4 1QFY'21 1QFY'22 1QFY'21 1QFY'22 1QFY'21 1QFY'22 Higher revenue mainly due to higher EBIT Margin energy payment resulted from higher fuel prices. 32
Slide 33: International Performance as at Mar'22: Vantage RE and Shuaibah
INTERNATIONAL BUSINESS & ASSETS International Performance as at Mar’22 Vantage RE EM: 67% Shuaibah EM: 82% E B I T DA ( m i l ) E B I T DA ( m i l ) 232.90 253.58 8.11 10.13 11.18 13.60 62.11 67.62 GBP USD SAR USD 1QFY'21 1QFY'22 1QFY'21 1QFY'22 • Higher EBITDA YoY due to higher YTD EBITDA in Q1 202
Slide 34: International Performance as at Mar'22: GEAS and GEL
INTERNATIONAL BUSINESS & ASSETS International Performance as at Mar’22 GAMA Enerji A.S. (GEAS) EM: 25% GMR Energy Limited (GEL) EM: 35% E B I T DA ( m i l ) 1 E B I T DA ( m i l ) 1 3,772.20 50.44 250.28 410.53 33.33 29.84 852.82 11.53 TRY USD INR USD 1QFY'21 1QFY'22 1QFY'21 1QFY'22 • Higher EBITDA
Slide 35: Our RE journey is progressing well
Our RE journey is progressing well TNB RE Journey Renewable capacity (MW) 31% 8,300 15% 3,596 813 2,783 Note: - - • RE capacity includes large hydro • Gross RE Capacity RE April 2022 RE 2025 International Domestic % of TNB’s RE Recent RE Progress 1) Domestic renewables ▪ We have signed a 30-years po
Slide 36: Ensuring revenue from coal remains below 25%
Ensuring revenue from coal remains below 25%, towards longer-term aspiration Actual Group Revenue 1QFY22 (%) 4 3 * RE Related to Energy Coal Others * 21 Transition (ET) * Others include revenue from regulated entities, subsidiaries and generation from gas 72 Long-term aspiration : ▪ No new coal plan
Slide 37: Slight decrease of coal price in 1QFY'22
Slight decrease of coal price in 1QFY’22 723.70 696.30 557.21 530.47 517.93 458.12 422.60 428.44 395.92 379.84 361.40 411.10 361.22 363.40 347.03 361.70 352.05 375.30 321.56 359.91 340.50 291.87 289.33 281.12 324.99 301.88 248.60 249.03 268.24 294.87 265.81 238.77 250.78 229.76 Q1 FY18 Q2 FY18 Q3 FY
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 1QFY’22 USD/metric tonne (MT) 75.4 66.0 55.7 72.7 95.9 79.3 60.6 116.2 165.5 RM/metric tonne (MT) 244.6 236.0 231.1 314.7 388.1 326.3 255.6 481.3 696.3 Coal Consumption Country Mix
Slide 39: TNB market capitalisation of RM51.5bil as at 31st March 2022
TNB market capitalisation of RM51.5bil as at 31st March 2022 Top 10 KLCI Stocks by Market Capitalisation RM bil Khazanah Nasional Berhad 106.2 Maybank 18.4 16.0 98.6 Permodalan Nasional Berhad (PNB) Public Bank 90.7 +12.3% 18.4 17.7 80.8 Employees Provident Fund Board (EPF) 7.3 76.8 7.4 Petronas Che
Slide 40: Thank You
THANK YOU IR OFFICERS: 1) Mehazatul Amali Meor Hassan • +603 2108 2126 CoE INVESTOR RELATIONS • mehazatul@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 592
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