Electricity tariffs up by 15-17% after TNB posts RM4.6bn profit

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Only recently, 1 November 2013, a business press report told us how well TNB had performed in 2013.

Source: TNB Energy Incorporated 2013 Annual Report
Source: TNB Energy Incorporated 2013 Annual Report

The profit would have been even more than RM4.6bn if not for forex losses in the fourth quarter. In TNB’s fourth quarter 2013 financial statement, it was stated, “Additionally, the weakening of Ringgit against the US Dollar and Japanese Yen during the quarter under review has resulted the Group reported a huge loss in foreign currency translation of RM617.7 million as compared to a gain of RM324.7 million recorded in the last quarter.”

And this is how the whole year’s financial result was reported. This excerpt was from a Business Times report titled Bright FY2013 for TNB:

STRONG RESULTS: Group-level revenue hits mind-boggling RM37.13b as utility expects steady demand growth

TENAGA Nasional Bhd posted a RM4.6 billion net profit for the financial year ended August 31 2013, up from the RM4.4 billion recorded in the same period last year.

The higher profit ratio was due to better electricity sales in Peninsular Malaysia and Sabah, which grew at 4.3 per cent and 7.3 per cent, respectively.

Group-level revenue came in at a mind-boggling RM37.13 billion from RM35.84 billion previously.

TNB chairman Tan Sri Leo Moggie said for the financial year ending 2014, the electricity demand growth is expected to remain steady, bolstered by the improving global outlook and supported by domestic economic growth of 5.0 to 5.5 per cent, as announced in the 2014 Budget.

He said this after the company, one of the largest capitalised stock on Bursa Malaysia, announced its 12-month financial report card.

Still, 2013 would have been a much better year for TNB, if not for the foreign exchange losses in the last three months of its financial year.

Net profit for the fourth quarter slumped by more than two thirds, resulting in the utility reporting a net profit of RM219.4 million against the RM1 billion in the same period last year.

The forex losses were attributed to the weakening of the ringgit against the US dollar and the Japanese yen at 6.4 and 9.3 per cent, respectively.

The profit before tax and zakat was actually RM5.9bn (RM4.7bn in 2012).

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TNB also had a healthy bank balance of RM9.5bn and a net current assets surplus (an indicator of liquidity) of RM9.6bn. Its current assets to current liabilities ratio (known as Current Ratio) is 1.9, well above the 1.0 threshold below which a company would find it difficult to meet its financial obligations. It is not exactly in dire straits.

Meanwhile operating expenses increased by just 1.8 per cent, as stated in the Annual Report 2013: “Countering this, we still incurred additional fuel costs from burning oil and distillate to meet rising electricity demand in FY2013. This contributed to an 1.8% increase in our operating expenses from RM31.31 billion the previous year to RM31.86 billion.”

Return on shareholders’ equity was 13.4 per cent in 2013 compared to 11.4 per cent in 2012.

And the share price has been steadily rising.

So what do you think? Does TNB deserve a 15 per cent tariff increase?

If at all a tariff hike is necessary, an increase in the region of 3-5 per cent would have been more palatable under the circumstances. And TNB should look into plugging inefficiencies and non-revenue electricity lost.

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16 COMMENTS

  1. Tariff hikes dispite significant profit. Is Tenaga anticipating further forex loss when US actually tapers?

  2. save money after 15% electricity hike, i think i cuti-cuti msia now looking for value for money deals.

    no more theme parks for my children,

    i now plan to take them “treasure hunting” at Bujang Valley no expensive entrance fee; before more artifacts being removed. May be sejarah (in PMR sejarah syllabus ?) about earliest settlers in Kedah (not necessarily from Kerala but other parts of India/Indo continent) need to be revised ?

    http://www.themalaysianinsider.com/malaysia/article/in-bujang-valley-activist-fears-ancient-temples-doomed-says-more-secretly-d

    Adventure like Indiana Jones there (foc).

  3. Just like your dynamo generators using hydro electric power will not consume any fossil fuel. China 3 Gorge Hydro Electric Power Plant is one. Soon there will be no electric wire but electricity transmitted through waves just like the radio. Whether using fossil fuel or not there will still be the infrastrature and minatenance cost of operating and transmitting. The increase is a foreseen conclusion and to all working guys and self employed you will have to further tighten your belt as there will not be any or much any increase in salary due to higher expenditure for the company couple with the deterioriating business environment. You will have to work extra hard or get another part time job. Like I said we do not have much choice whether PR or BN as both are bs and it is just as smelly

  4. Electricity hike will kick start more barang naik in 2014 as manufacturers have excuse that cost of production is going up. Since electricity is a basic neccessity, there should be NO MONOPOLY. The IPPs are also capable of producing electricity and if given the chance to sell directly to the people, then we can get them competing to provide cheaper electricity. With these price increase all Govt projects will have cost overrun. All cronies will be laughing to the bank.

    Malaysia’s national debts now stand at around RM700 billion. That means the statutory debt limit has been exceeded. It also means that the government is having a problem in servicing the debts, as Malaysia’s reserves stands at only around RM460 billion. So Najib is finding all means to squeeze money from rakyat to feed the bloated civil service and to reward the cronies.

  5. I’ve stocked up on gas lanterns and candles. I will also restrict tv hours to one hour in the morning and have begun sleeping in my birthday suit without switching on the fan at night.

    I KNEW there was a reason why Astro started airing shows like Extreme Cheapskate!

    Thank you BN for screwing us all and forcing us to pay for your upkeeps

    • Batu Ferribghian
      Recommend you lie on the rocks at north coat of penang very cooling at night; just watch out don’t be mistaken during Ops Tangkap Basah !
      Astro also shows Extreme Couponing. May be local Tesco, Giants etc can issue discounted coupons to the deserving consumers ?

  6. I told you so before the GE that it will be pay back time after the GE and when the present regime remains in Putrajaya. Now just see what is happening ?
    That is the only way these Umno warlords can come up with to balance the books, as for the promises they made before the GE, well a good example of what they will do to ‘honour’ their promises. One does’t not have to look far just look at the one million affordable houses Najib promised to build if he is retained in power.
    Well, seven months have passed since the GE or more than 6 months after the GE, what has Najib built to date ? He is just waiting for the lackey to fill up from MCA to fill up the housing portfolio so that building of the one million houses responsibility is on this lackey. And therefore the inability to complete building the one million affordable houses is no on him. How cunning is that ?
    But neither are the people fools like he thinks we are, insofar as the people are concerned Najib you made the promise and we expect you to keep the promise even if you have to take on the additional portfolio of housing. Or at least until the lackey from MCA reveals his true colour and stop pretending that he and all his colleagues will honour their promise that none of them will accept any cabinet roll in the cabinet. The people will not forget you were the one who made the promise, period.
    Remember 10% of your time in Putrajaya is gone, that is if you or your regime are able to stay on as the ruling party for the full term. Don’t wait any more because I shall keep reminding you until the next GE, I am making this to be my mission in life at this time !

  7. Don’t blame us the prudent+careful Rakyat for switching off everyone-can-see lights early (not necessary during annual Earth Hour) & thereafter causes a population hike (or boom) in 2014 🙂 🙂 🙂 !
    Shouldn’t we then blame TNB for being careless in the dark on our behalf?

    Cheers Kopi-O kau kau + one candle light which brings back the 70s good old days of romancing in the dark!
    Since December Holiday mood is in the air, let’s sing along:
    “Silent Night, Careful Night, All Is Dark, Save TNB Light…” (the rest you’s imagination).

    • candle in the dark ?!
      so better enjoy penang street food now in December otherwise by 2014 most food vendors very likely to increase the prices accordingly with not just electricity but confirmed flour price increase also !

    • One of the reasons I prefer Belum Rainforest, you are perpetually off the grid (of paying monopolistic utilities suppliers at their bean-counting fancies).

      Free electricity?
      Nikola Tesla claimed the invention of an electrical generator that would not consume any fuel. This invention has been lost to the public (how come?). Tesla stated about his invention that he had harnessed the cosmic rays and caused them to operate a motive device.
      Perhaps, politically linked corporate America feared, sweated & hated the idea of free energy for every Tom, Dick & Mary.

      • $ave Money now ! :

        a) Don’t eat out too often at fast food outlets etc and cook at home. Don’t patronise those hawkers who simply increase price at every opportunity with lame excuses (still believe most famous ori-maestro hawkers have solid bank account just act act only).

        b) Want to feel coolness of air-con ? Just spend time window shopping at Malls and enjoy the aircon. Then go back wear birthday suit to bed with natural breezes from opened windows.

        c) Watch only essential educational TV programs to save electricity. Log in to anilnetto.com for current affairs and not to rely on skewed reporting from CNN BBC and local TVs.

        d) Walk more. Cycle more. Trade the cars for motorbikes. Trade motorbikes for bicycles etc.

        e) Stick to one Gadget a year. Don’t simply upgrade your ego-lifestyle unless money comes to you easily (i don’t mean BR1M as you grandchildren will be burdened later)

  8. Maybe we citizens (captives of a regime-created monopolist) can “go on strike” and generate our own electricity? Anyone out there who can give us advice on this?

    How about installation of solar panels i.e. how much and is it cost-effective?

  9. TNB should first go after the electricity cheats and thieves plus improving their own productivity rather than seeking the easy way of increasing the tariff. Simply speaking, honest users should not be made to bear the cost for TNB’s own inefficiency or lack of determination to go after the electricity thieves and cheats.

  10. If TNB is making so much profit, why are consumers asked to pay a 15% increase come January. Who is robbing the rakyat?

Comments are closed.