TENAGA 1Q earnings flat at RM712.9m

TENAGA NASIONAL BHD [] reported earnings of RM712.9 million in the first quarter ended Nov 30, 2010, just a marginal 1% increase from the RM706.3 million a year ago as it was impacted by higher coal prices.

The power giant said on Wednesday, Jan 19 there was an increase in forex translation loss of RM104.8 million as compared to RM45.4 million a year ago due to the strengthening of the yen and US dollar against the ringgit.

Tenaga said revenue rose 5.3% or RM388.10 million to RM7.726 billion from RM7.338 billion. Earnings per share were 16.38 sen versus 16.28 sen. The 5.3% increase in revenue was maninly due to an increase in sales of electrcity in the peninsula and Sabah Electricity Sdn Bhd (SESB).

"The electricity demand has shown a growth of 5% in the peninsula and 6.4% in SESB as compared to the previous corresponding period last financial year," it said.

Operating expenses roase at a faster rate mainly due to higher generation costs as the average contracted coal price was US$95.5 per tonne compared with US$79.5 a tonne a year ago.

When compared to the fourth quarter ended Nov 30, 2010, revenue declined by 1.8% from RM7.869 billion.

"Despite the lower revenue, operating profit recorded an increase of 75%, amounting to RM537 million," it said, attributing this to lower oeprating expenses in the current quarter.

"This resulted in a net profit after tax (attributable to owners of the company) of RM712.9 million, an increase of 83.5% as compared to RM388.4 million reported in the previous quarter," it said.

Tenaga said the lower operating expenses were mainly due to lower fuel costs, down 6.8%, from the fourth quarter.

However, on the prospects for the current financial year ending Aug 31,2011, "the board of directors expects the group's prospects... to be very challenging". - by Joseph Chin of theedgemalaysia.com