Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — CLSA 20th Investors' Forum 2013
39 slides from Tenaga Nasional Bhd's conference presentation, Sep 25, 2013
Slide 1: CLSA 20th Investors' Forum 2013
CLSA 20th INVESTORS’ FORUM 2013 GRAND HYATT, HONG KONG (23rd – 25th September 2013) Prepared by: tenaga_ird@.tnb.com.my Investor Relations & Management Reporting Department GROUP FINANCE DIVISION
Slide 2: Part One
CLSA 20th INVESTORS’ FORUM 2013 PART ONE 2
Slide 3: Agenda
AGENDA 3QFY13 1 • INTRODUCTION TO TENAGA 2 • INTRODUCTION TO MESI 3 • BUSINESS STRATEGY & DIRECTION 4 • TARIFF 5 • DIVIDEND POLICY • OUTLOOK – KEY TAKEWAWAYS 6 3
Slide 4: Introduction to Tenaga
CLSA 20th INVESTORS’ FORUM 2013 1 INTRODUCTION TO TENAGA 4
Slide 5: Introduction to Tenaga: Three Major Utilities in Malaysia
INTRODUCTION TO TENAGA Three Major Utilities in Malaysia 3QFY13 Sabah Electricity Sdn Bhd Tenaga Nasional Bhd (A 83% TNB Subsidiary) (TNB) 1,141MW* 21,749MW* BRUNEI SABAH PENINSULAR 695MW MALAYSIA 1,237MW SARAWAK 11,506MW Sarawak Electricity Board (SEB) SINGAPORE * Includes IPPs 4.8% INSTALLED CAPAC
Slide 6: Vertically Integrated Utility
INTRODUCTION TO TENAGA Vertically Integrated Utility 3QFY13 52.7% 100% 100% Core Business – Peninsula Generation Transmission Distribution Source: The Sun; 7th March 2013 Source: The New Straits Times; 7th March 2013 6
Slide 7: No of Customer vs. Sales Value vs. Unit Sales
INTRODUCTION TO TENAGA No of Customer vs. Sales Value vs. Unit Sales 3QFY13 100% 0.8% 1.3% 1.8% 18.1% 21.2% Sectoral Sales Analysis (Gwh) 80% 60% 82.0% 41.5% 34.4% *FY13 42.6 34.4 21.2 1.8 FY12 43.6 34.1 20.6 1.7 40% 42.6% FY11 44.3 33.8 20.3 1.6 20% 39.0% 16.8% 44.8 33.4 20.3 1.5 FY10 0% 0.4% No of
Slide 8: Industry Regulatory Framework
INTRODUCTION TO TENAGA Industry Regulatory Framework 3QFY13 Empowered by Electricity PRIME MINISTER Supply Act /CABINET 1990 Holds ‘Golden’ Special Purpose Agency Share created to detail out the key reform initiatives of the Malaysian Electricity Supply 33.46% Industry (MESI), aligned with MyPOWER M
Slide 9: Introduction to Malaysian Electricity Supply Industry (MESI)
CLSA 20th INVESTORS’ FORUM 2013 INTRODUCTION TO 2 MALAYSIAN ELECTRICITY SUPPLY INDUSTRY (MESI) 9
Slide 10: Transformation Initiatives by Government
INTRODUCTION TO MESI Transformation Initiatives by Government 3QFY13 Legal & 1st Gen IPP / Subsidy FCPT Nuclear Energy National RE LNG FIT & RE Fund Regulatory Restricted Rationalisation Capacity Policy & Action Framework Bidding Programme Mechanism Importation Building Plan Enhancement 10 *Source:
Slide 11: Transformation Plan: Timeline
INTRODUCTION TO MESI Transformation Plan : Timeline 3QFY13 1 Energy The New Energy Policy Addresses Pricing Economic Efficiency, Security of 2 Supply and Social & Energy 5 Change Environmental Objectives Supply New Management Energy Policy 3 4 Energy Governance Efficiency 2016 - 2010 2011 2012 2013
Slide 12: Energy Pricing – Competitive Bidding
INTRODUCTION TO MESI Energy Pricing – Competitive Bidding 3QFY13 TRACK 1 1071 MW CCGT PRAI TRACK 3A 1 X 1000 MW COAL-FIRED COD January 2016 COD October 2017 STATUS TNB has signed agreements on 16/8/13 for: LEVELISED 34.7 sen/kWh i. PPA with TNB Manjung Five Sdn Bhd “Manjung 5” to TARIFF design, cons
Slide 13: Energy Pricing – Competitive Bidding: Why TNB Should Participate
INTRODUCTION TO MESI Energy Pricing – Competitive Bidding 3QFY13 To ensure healthy competition for new generation capacity 1 Customers benefit from competitive rates. 2 TNB’s participation in the bidding process -> Why should TNB be allowed people’s best interest. 3 to participate in competitive bid
Slide 14: Energy Supply - Four Dimensions of Energy Security
INTRODUCTION TO MESI Energy Supply - Four Dimensions of Energy Security 3QFY13 Fuel Mix and Fuel Supply Security Must Be Managed to Ensure A Reliable Electricity Supply *Source: MyPower / Frontier Economics 14
Slide 15: Incentive Based Regulation (IBR)
INTRODUCTION TO MESI Energy Efficiency & Governance - Incentive Based Regulation (IBR) 3QFY13 Economic regulation methodology proposed by EC to promote efficiency and transparency through incentive and penalty mechanism 3 broad efficiency categories offered by IBR: Tariff Efficiency Setting Operatio
Slide 16: IBR Implementation Timeline by EC
INTRODUCTION TO MESI Energy Efficiency & Governance - Incentive Based Regulation (IBR) 3QFY13 IBR Implementation Timeline by EC 2012 2013 2014 2015 2016 2017 Budget 2014 Feb Nov Aug Aug Sept Aug Aug 25/10 First Regulatory Period Interim Period ( 3-year period from FY2015 to FY2017) (FY2014) EC issue
Slide 17: Business Strategy & Direction
CLSA 20th INVESTORS’ FORUM 2013 3 BUSINESS STRATEGY & DIRECTION 17
Slide 18: 20-Year Strategic Plan
BUSINESS STRATEGY & DIRECTION 20-Year Strategic Plan 3QFY13 THE PLAN LAYS DOWN THE PATH TOWARDS REALISING OUR VISION OF GLOBAL LEADERSHIP GLOBAL It builds upon the progress of T7 LEADERSHIP 2025 • Excel in: - All business areas OVERSEAS - Reputation as a INVESTMENT 2020 strong business partner - Abi
Slide 19: International Footprint
BUSINESS STRATEGY & DIRECTION International Footprint 3QFY13 Leverage on Tenaga’s capabilities (in Middle East and North Africa “MENA” area) in pursuing International Business (O&M), Project Management in generation Business REMACO O&M for Shuaiba North Co-Gen (USD320m) 780MW Power; 204,000 m3 / TNE
Slide 20: Domestic Dominance Regional Champion
BUSINESS STRATEGY & DIRECTION Domestic Dominance Regional Champion “DDRC” 3QFY13 TNB Transformation Paves the Way for TNB to Become a Strong Leader at Home while Growing as a Regional Champion Strong domestic leader Regional champion ▪ Ensure universal access to power Develop our country ▪ Develop p
Slide 21: Headline KPIs: 2nd Phase TNB 20-Year Strategic Plan
BUSINESS STRATEGY & DIRECTION Headline KPIs : 2nd Phase TNB 20-Year Strategic Plan 3QFY13 Most Targets that were Set in 2005 were Met Ahead of Target Date 1ST PHASE 2ND PHASE ACTUAL ACTUAL INITIATIVES TARGET ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL TARGET FY’11 FY‘12 FY’10 FY’05 FY’06 FY’07
Slide 22: Tariff
CLSA 20th INVESTORS’ FORUM 2013 4 TARIFF 22
Slide 23: Tariff History: Timeline
TARIFF History: Timeline 3QFY13 Government reduced gas price Government increased gas price to to RM10.70/mmbtu. In support RM13.70/mmbtu. Another submission of Government efforts to In line with Government effort to to the Government introduce economic stimulus gradually remove subsidies package to
Slide 24: Electricity Tariff Review
TARIFF Electricity Tariff Review 3QFY13 Approval date May 2006 Jun 2008 Feb 2009 Jun 2009 May 2011 Effective date Jun 2006 Jul 2008 Mar 2009 Jul 2009 Jun 2011 Quantum 12% 23 – 24% (3.7%) Neutral 7.1% Gas (RM/mmbtu) 6.40 14.31 10.70 10.70 13.70 Coal (USD/MT) 45.00 75.00 85.00* 85.00* 85.00* Average T
Slide 25: Benchmarking: Comparison with Regional Countries
TARIFF Benchmarking : Comparison with Regional Countries 3QFY13 DOMESTIC COMMERCIAL INDUSTRIAL 25
Slide 26: Dividend
CLSA 20th INVESTORS’ FORUM 2013 5 DIVIDEND 26
Slide 27: Dividend Policy and Yield
DIVIDEND Policy and Yield 3QFY13 Tenaga is committed to pay out dividend based on its Dividend Policy whereby: Dividend is paid out based on 40% to 60% of its Company’s annual free cash flow; Cash flow from Operations less Normalized Capex and Interest Servicing The Board of Directors has approved a
Slide 28: Outlook – Key Takeaways
CLSA 20th INVESTORS’ FORUM 2013 6 OUTLOOK – KEY TAKEAWAYS 28
Slide 29: Outlook FY2013 - Demand
OUTLOOK – KEY TAKEAWAYS Outlook FY2013 - Demand 3QFY13 Group’s Performance for the FY Ending 31st August 2013 is Expected to Remain Stable 1 DEMAND 2 GAS VOLUME 3 COAL PRICE Remains steady with the Expected to improve with Coal price is expected to implementation of ETP commencement of RGT in remain
Slide 30: Part Two
CLSA 20th INVESTORS’ FORUM 2013 PART TWO 30
Slide 31: 9MFY2013 Results Highlights
CLSA 20th INVESTORS’ FORUM 2013 9MFY2013 RESULTS HIGHLIGHTS 31
Slide 32: Results Snapshots
RESULTS HIGHLIGHTS Results Snapshots 3QFY13 3-Month Ended 31st May 2013 (3rd Quarter FY2013) • Net Profit before Forex Translation of RM1.38 billion (2QFY2013: RM0.88 billion). • Strengthening of RM against Yen by 8.3%. • Average Coal Price of USD84.4/mt (2QFY2013: USD84.7/mt). • Net Profit of RM1.7
Slide 33: Adjusted Net Profit (Restated Fuel Cost Compensation)
RESULTS HIGHLIGHTS Adjusted Net Profit (Restated Fuel Cost Compensation) 3QFY13 36.0% Improvement in Adjusted Net Profit Before Forex Translation Mainly Attributed to Electricity Demand Growth and Lower Coal Price • The Fuel Cost Sharing Mechanism was approved to address the current increased cost b
Slide 34: Year-on-Year Analysis (Restated Fuel Cost Compensation for FY2012)
RESULTS HIGHLIGHTS Year-on-Year Analysis (Restated Fuel Cost Compensation for FY2012) 3QFY13 Improved Net Profit Resulted from Forex Translation Gain & Lower Coal Price 9MFY2012 RM mn 9MFY2013 1QFY2013 2QFY2013 3QFY2013 (Restated) Total Units Sold (Gwh) 75,400.9 78,009.8 26,070.4 26,058.7 25,880.7 R
Slide 35: System Weekly Peak Demand (Peninsula) FY2009/10 to FY2013/14
RESULTS HIGHLIGHTS System Weekly Peak Demand (Peninsula) for FY2009/10 to FY2013/14 3QFY13 Weekly Peak Demand & Trough (MW) 35
Slide 36: Coal Requirement
RESULTS DETAILS Coal Requirement 3QFY13 Coal Procurement Estimate for FY2013 is at 22.0 mn MT FY’04 FY’05 FY’06 FY’07 FY’08 FY’09 FY’10 FY’11 FY’12 9MFY’13 Average Coal Price Tonne (mn) (CIF) (USD/metric 34.0 49.8 52.8 45.3 76.4 90.2 88.2 106.9 103.6 84.5 tonne) 25.0 22.0 20.8 Ongoing negotiations 8
Slide 37: Disclaimer
DISCLAIMER 3QFY13 All information contained herein is meant strictly for the use of this presentation only and should not be used or relied on by any party for any other purpose and without the prior written approval of TNB. The information contained herein is the property of TNB and it is privilege
Slide 38: Contact Details
CONTACT DETAILS 3QFY13 For further enquiries, kindly contact us at: INVESTOR RELATIONS & MANAGEMENT REPORTING DEPARTMENT Tenaga Nasional Berhad 4th Floor, TNB Headquarters No.129, Jalan Bangsar, 59200 Kuala Lumpur, MALAYSIA Tel : +603 2296 5566 Fax : +603 2284 0095 Email : tenaga_ird@tnb.com.my Webs
Slide 39: Thank You
CLSA 20th INVESTORS’ FORUM 2013 THANK YOU www.tnb.com.my
Tenaga Nasional Berhad — CLSA 20th Investors' Forum 2013 on 6ix