Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — FY2020 Earnings Presentation
45 slides from Tenaga Nasional Bhd's earnings presentation, Feb 26, 2021
Slide 1: 4QFY2020 Presentation to Analysts
FINANCIAL DETAILS 02 4QFY2020 PRESENTATION TO ANALYSTS 26TH FEBRUARY 2021 Unaudited Consolidated Result for the 4th Quarter FY2020 Ended 31st December 2020 1
Slide 2: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 FINANCIAL DETAILS 04 OUTLOOK 05 APPENDIX 2
Slide 3: FY2020 Highlights & Focus Areas
KEY HIGHLIGHTS FY2020 HIGHLIGHTS & FOCUS AREAS FY2020 Highlights Focus Areas 01 02 Reimagining TNB's (RT) aspiration: To be the leading provider of sustainable energy solutions in FY2020 performance continue to RP2 extension approved with Malaysia and internationally. improve favourable terms • Cont
Slide 4: Financial Performance Overview
KEY HIGHLIGHTS FINANCIAL PERFORMANCE OVERVIEW Our Revenue Cap entities insulated via IBR framework. However, Y-o-Y earnings remain impacted due to economic slowdown REVENUE EBITDA PROFIT AFTER TAX RM mil RM mil RM mil (2.3%) (13.7%) (12.2%) (18.6%) 18,395.7 (4.0%) 17,981.2 ICPT 50,939.7 ICPT 1,917.9
Slide 5: Normalised EBITDA & PAT
KEY HIGHLIGHTS NORMALISED EBITDA & PAT Y-o-Y normalised EBITDA & PAT impacted in FY’20 mainly from the movement control order 1 EBITDA FY'19 FY'20 Lower Normalised EBITDA and PAT in FY’20 mainly due to: Components RM mil RM mil Reported EBITDA 18,395.7 17,981.2 RM mil Impairment 334.0 51.6 Allowance
Slide 6: International Business
KEY HIGHLIGHTS INTERNATIONAL BUSINESS Vortex Solar UK Limited EM: 80% Tenaga Wind Ventures (TWV) EM: 76% Shuaibah EM: 80% E B I T DA ( mi l ) E B I T DA ( mi l ) E B I T DA ( mi l ) 49.89 39.05 991.20 962.20 39.07 30.27 17.11 22.07 14.38 18.36 265.03 257.27 GBP USD GBP USD SAR USD FY'19 FY'20 FY'19
Slide 7: International Business
KEY HIGHLIGHTS INTERNATIONAL BUSINESS GMR Energy Limited (GEL) EM: 34% GAMA Enerji A.S. (GEAS) EM: 24% TNB Liberty Power Limited (LPL) EM: 28% E B I T DA ( mi l ) 1 E B I T DA ( mi l ) 1 , 2 E B I T DA ( mi l ) 6,297.13 5,970.63 85.68 669.44 696.60 81.43 118.68 99.97 4,570.53 4,183.36 30.54 25.86 TR
Slide 8: CAPEX
KEY HIGHLIGHTS CAPEX Southern Power Generation is successfully commissioned in January 2021, regulated CAPEX fully utilised RM mil 11,261.7 7,850.1 RP2 REGULATED ENTITIES CAPEX FY IBR Approved Actual YTD Utilization 700.4 (RM mil) (RM mil) (%) 3,019.7 1,236.8 2018 6,263.7 6,680.0 2019 6,188.1 7,097.
Slide 9: Dividend
KEY HIGHLIGHTS DIVIDEND Rewarding shareholders with a special dividend of 40.0 sen per share in addition to a final dividend of 18.0 sen per share Dividend Payout (RM’ bil) 5.69 4.56 DIVIDEND POLICY Dividend Payout (%) 58.5 (based on Adjusted 56.0 Distribution of dividend is based on 30% to 60% PATA
Slide 10: Dividend Yield
KEY HIGHLIGHTS DIVIDEND YIELD List of top 30 KLCI companies by dividend yield TNB ranks 1st for 2019 and 2020 among top 30 KLCI companies in dividend yield due to proactive balance sheet management * No. Company 2016 2017 2018 2019 2020 1 TNB 2.3% 4.0% 3.9% 7.5% 7.7% 2 Petronas Gas 2.9% 3.8% 3.8% 4.
Slide 11: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 FINANCIAL DETAILS 04 OUTLOOK 05 APPENDIX 11
Slide 12: Electricity industry continues to evolve
STRATEGY SUSTAINABILITY Electricity industry continues to evolve, creating new opportunities and pushing the boundaries for innovation Inevitable Changes in Industry Landscape Emergence of Disruptive Changing Customers’ Global Energy Transition Expectations Technologies Climate change drives great
Slide 13: TNB's pivotal role in the nation's energy transition
STRATEGY SUSTAINABILITY As the primary driver of the nation's Energy Transition, TNB has a pivotal role in spearheading an evolving industry TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Future Generation Sources Grid of the Future Winning the Customer Futu
Slide 14: Sustainable energy sets the tone for ambitious RE targets
STRATEGY SUSTAINABILITY The increasing emphasis on Sustainable Energy sets the tone for ambitious RE targets Progress 32% of TNB’s capacity target by 2025 i. Currently in discussion with EC on the terms and condition for Nenggiri large Domestic hydro plant (300MW) 8,300MW ii. GSPARX - Total 81 MW (s
Slide 15: Investment in infrastructure for regulated business
STRATEGY SUSTAINABILITY Investment in infrastructure for regulated business is key towards catalysing a sustainable energy ecosystem…Distribution Network (DN) plays central role in infrastructure development kWh Regulated businesses spends on average ~16% of its CAPEX towards supporting Energy Trans
Slide 16: Empowering customer participation in Energy Transition
STRATEGY SUSTAINABILITY In addition, TNB is empowering customer participation in the Energy Transition and paving the way for electrification efforts Facilitates the implementation of the Net Energy Metering (NEM) scheme and the Supply Agreement for Renewable Energy (SARE) Rooftop PV: Total 81 M
Slide 17: Corporate Responsibility pillars
STRATEGY SUSTAINABILITY TNB continues its Nation-Building legacy through Corporate Responsibility pillars anchored on empowering communities for a better, brighter Malaysia Education My Brighter Future Yayasan Tenaga Nasional We believe that education can transform lives of not just one individu
Slide 18: Corporate governance standards
STRATEGY SUSTAINABILITY TNB upholds the highest standards of corporate governance embedded in a culture that values ethical behaviour, integrity and sustainability Main Market Listing Requirements of Bursa Malaysia Securities Berhad TNB Corporate Malaysian Code on Corporate Governance 2017 Gover
Slide 19: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 FINANCIAL DETAILS 04 OUTLOOK 05 APPENDIX 19
Slide 20: Revenue
FINANCIAL DETAILS REVENUE Lower sales of electricity compensated through regulatory adjustment, while non-regulated business impacted by Covid-19 pandemic 1 Variance Variance Lower 4Q vs 3Q and Y-o-Y unit sold & revenue 4QFY'20 3QFY'20 FY'20 FY'19 due to lower demand in Industrial and (4QFY'20 vs 3Q
Slide 21: Regulatory Adjustment
FINANCIAL DETAILS REGULATORY ADJUSTMENT As at FY’20, RM621.0mil of other regulatory adjustment to be returned mainly due to higher average selling price from price cap entity 1QFY’20 2QFY’20 3QFY’20 4QFY’20 YTD FY’20 Components of Other Regulatory Adjustment (RM mil) (RM mil) (RM mil) (RM mil) (RM m
Slide 22: Revenue Adjustment for Revenue Cap & Price Cap
FINANCIAL DETAILS REVENUE ADJUSTMENT FOR REVENUE CAP & PRICE CAP Regulated business entities supported by an effective IBR framework Revenue Cap (Transmission, Dist. Net, GSO & SBO) Price Cap (Customer Service/Retail) Answer: • The allowed annual revenue for revenue cap entities is • Any excess reve
Slide 23: Demand Growth
FINANCIAL DETAILS DEMAND GROWTH Y-o-Y electricity demand contracted in tandem with GDP GDP & TNB (Peninsula) Demand Growth TNB (Peninsula) Maximum Demand 5.9 % 5.0 4.7 4.3 4.2 4QFY’20 4QFY’19 Variance (%) Maximum 18,037 17,680 2.0 2.5 2.5 3.2 2.7 Demand (GWh) 2.2 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20
Slide 24: Sectoral Growth (Peninsula)
FINANCIAL DETAILS SECTORAL GROWTH (PENINSULA) Lower electricity demand mainly from sluggish industrial and commercial sectors 4Q main contributors for the drop Commercial Industrial Industrial: Y-o-Y (7.6%) Y-o-Y (12.1%) • Iron and steel • Cement products • Edible oil products (0.1%) (28.3%) (8.4%)
Slide 25: Group Opex
FINANCIAL DETAILS GROUP OPEX The IBR framework and lower non-generation cost cushioned the impact on EBITDA Variance Variance 4QFY'20 3QFY'20 FY'20 FY'19 (4QFY'20 vs 3QFY'20) (FY'20 vs FY'19) (RM mil) (RM mil) (RM mil) (RM mil) RM mil % RM mil % Non-TNB IPPs Costs 1,877.8 2,038.9 (161.1) (7.9) 8,271
Slide 26: Y-o-Y Fuel Cost (Peninsula)
FINANCIAL DETAILS Y-o-Y FUEL COST (PENINSULA) Lower fuel prices from coal and gas reduced generation cost Table A Table C TNB & IPP Fuel Costs for Peninsula (RM mil) Fuel Costs Related Data FY’20 FY’19 Variance Fuel Type FY'20 FY'19 Daily Average Piped Gas Volume (mmscfd) 712.3 1,046.0 RM mil % Coal
Slide 27: Gearing
FINANCIAL DETAILS GEARING Increased in total debt due to drawdown of new sukuk, however capital headroom remains healthy Statistics 31 st Dec'20 31 st Dec'19 RM Equivalent of Loan Value (bil) 1 Total Debt (RM' Bil) 49.5 45.4 Net Debt (RM' Bil)* 36.0 31.2 1 Gearing (%) 46.3 43.4 Net Gearing (%) 33.7
Slide 28: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 FINANCIAL DETAILS 04 OUTLOOK 05 APPENDIX 28
Slide 29: Outlook: Electricity Demand
OUTLOOK • Under RP2 extension year, our approved demand forecast is 113,909 GWh or 2.9% growth compared to JPPPET revised FY2020 forecast. Electricity • Given that most of the Industrial and Commercial sectors are allowed to operate during MCO 2.0, we expect the Demand impact of the lockdown to the
Slide 30: Electricity bill discounts mitigate collection risk
OUTLOOK Electricity bill discounts funded by the Government mitigates the overall collection risk, cushioning the impact on allowance for doubtful debt Trade Debtors Ageing (RM bil) Trade Debtors By Sectors Total 4.64 5.42 4.64 4.41 4.53 2% 2% 2% 2% 2% Undue 0.02 0.02 0.01 32% 30% 33% 32% Current 0.
Slide 31: Outlook: MESI 2.0 Regulatory
OUTLOOK • MESI 2.0 is currently under review by the Government. TNB is working closely with the Regulators towards realising the reform plans. • TNB has been preparing for any future scenario reforms, putting in place a strong business strategy since 2015 i.e. Reimagining TNB. The formation of TNB P
Slide 32: Outlook: International Business and Dividend
OUTLOOK • For 2021, we will be executing a strategy aimed at protecting value from existing assets, which includes Liberty, Shoaiba, GEAS and GEL and creating value for performing assets (Vortex and TWV). • Part of this strategy involves executing a plan focusing on growing TNB’s international Renew
Slide 33: Content Overview
CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 FINANCIAL DETAILS 04 OUTLOOK 05 APPENDIX 33
Slide 34: Profit & Loss: Year-on-year analysis
APPENDIX 1 PROFIT & LOSS Year-on-year (Y-o-Y) analysis Variance RM mil FY'20 FY'19 RM mil % Y-o-Y PAT includes: Revenue 43,976.0 50,939.7 (6,963.7) (13.7) 1 Higher due to ADD of Operating expenses (without depreciation) (26,510.0) (33,372.6) 6,862.6 (20.6) RM325.9mil Net loss on impairment of financ
Slide 35: Profit & Loss: Quarter on quarter analysis
APPENDIX 2 PROFIT & LOSS Quarter on quarter (Q-o-Q) analysis Variance 4Q vs 3Q RM mil 1QFY'20 2QFY'20 3QFY'20 4QFY'20 RM mil % Q-o-Q PAT includes: Revenue 11,654.5 10,890.8 11,106.4 10,324.3 (782.1) (7.0) 1 Higher operating income Operating expenses (without depreciation) (6,954.6) (6,483.3) (6,939.
Slide 36: Net Impact of MFRS 16
APPENDIX 3 PROFIT & LOSS The net impact of MFRS 16 reduced the group PAT by RM613.4mil Net Impact of MFRS 16 (Y-o-Y) analysis FY'20 FY'19 Variance Finance cost for Right of Use (ROU) assets under MFRS16 follows reducing Remarks (RM mil) (RM mil) (RM mil) balance schedule whereas capacity payment i
Slide 37: Q-o-Q Fuel Cost (Peninsula)
APPENDIX 4 Q-o-Q FUEL COST (PENINSULA) Lower fuel cost mainly due to cheaper gas price Table A Table C TNB & IPP Fuel Costs for Peninsula (RM mil) Fuel Costs Related Data 4QFY’20 3QFY’20 2QFY’20 1QFY’20 Variance 4Q vs 3Q Fuel Type 4QFY'20 3QFY'20 2QFY'20 1QFY'20 Daily Average Gas Volume (mmscfd) 744
Slide 38: Coal Price
APPENDIX 5 COAL PRICE Continuous downward trending of coal price will relieve pressure on future ICPT Coal Price Trending 458.1 422.6 428.4 395.8 376.6 411.1 362.7 361.4 361.2 347.7 337.5 375.3 347.0 361.7 352.0 359.9 340.5 331.3 327.9 291.9 294.9 320.3 301.9 281.1 256.2 254.1 254.6 289.3 248.6 256.
Slide 39: ICPT
APPENDIX 6 ICPT Continuous effective ICPT implementation neutralises the fluctuation in fuel costs 1QFY' 20 2Q FY' 20 3QFY’ 20 4Q FY’ 20 FY’ 20 (R M mn ) (R M mil) (R M mil) (R M mil) (R M mil) Reported Total Cost of Generation 5,019.7 4,415.0 4,404.5 3,745.9 17,585.1 (with MFRS16) Adjustment not re
Slide 40: Generation Mix
APPENDIX 7 GENERATION MIX Higher units generated from coal in FY’20 with the full operation of Jimah East Power GENERATION MIX FOR INDUSTRY (%) 0.6 0.7 0.8 0.7 0.7 0.7 3.1 2.7 3.0 4.5 4.9 3.8 0.1 0.0 0.0 0.0 0.0 0.0 66.9 66.2 65.8 65.6 64.6 53.9 42.3 30.0 29.7 29.8 31.0 27.9 FY'19 1Q'20 2Q'20 3Q'20
Slide 41: Generation Mix: Fuel costs and units generated
APPENDIX 8 GENERATION MIX Fuel costs (TNB & IPPs – Peninsula) Fuel Costs Units Generated Coal IPP, 26.1% Coal IPP, 24.2% Oil IPP, 0.1% Coal TNB, 34.9% Coal TNB, 39.8% Oil IPP, 0.0% Oil TNB, 0.1% Oil TNB, 0.1% Dist. IPP, 0.1% Dist. IPP, 0.0% Coal TNB, 23.4% Coal TNB, 29.0% Coal IPP, 24.9% Dist. TNB,
Slide 42: Coal Forecast
APPENDIX 9 COAL FORECAST Higher coal requirement for 2020 with the full operation of Jimah East Power Average Coal Price (CIF) FY'14 FY'15 FY'16 FY'17 FY'18 FY’19 FY’20 USD/metric tonne (MT) 75.4 66.0 55.7 72.7 95.9 79.3 60.6 RM/metric tonne (MT) 244.6 236.0 231.1 314.7 388.1 326.3 255.6 Coal Consum
Slide 43: Technical Results
APPENDIX 10 TECHNICAL RESULTS Improved technical performance 04 Equivalent Plant Availability Factor (EAF) System Minutes SAIDI (Generation) (Transmission) (Distribution Network) TITLE D 87.39% 0.08 mins 45.0 mins FY’19: 83.4% FY’19 : 0.27 mins FY’19 : 48.1 mins 43
Slide 44: TNB Shareholding Structure
APPENDIX 11 TNB SHAREHOLDING STRUCTURE TNB market capitalisation of RM59.4bil as at 31st December 2020 Top 10 KLCI Stocks by Market Capitalisation RM bil Khazanah Nasional Berhad 18.5 Maybank 95.1 (2.1%) 97.1 Permodalan Nasional Berhad 17.7 (PNB) 80.0 17.5 Public Bank 75.5 +6.0% 15.5 Employees Provi
Slide 45: Thank You
THANK YOU CoE INVESTOR RELATIONS GROUP FINANCE DIVISION Tenaga Nasional Berhad 4th Floor, TNB Headquarters No.129, Jalan Bangsar, 59200 Kuala Lumpur, MALAYSIA Tel : +603 2108 2128 Fax : +603 2108 2034 Email : tenaga_ird@tnb.com.my Website : www.tnb.com.my IR OFFICERS: 1) Mehazatul Amali Meor Hassan
Tenaga Nasional Berhad — FY2020 Earnings Presentation on 6ix