PETALING JAYA: Tenaga Nasional Bhd’s (TNB) net profit in the first quarter ended March 31, 2023 (Q1 FY2023) rose 12.2% to RM1 billion from RM893.1 million a year ago on the back of higher revenue and lower tax provisions which offset higher operating expenses.
Quarterly revenue was up 3.9% to RM12.63 billion from RM12.15 billion, on higher sales of electricity with demand growth of 0.8%, TNB said.
The increase was primarily attributed to lower tax provisions recognised in the current quarter, resulting from the higher utilisation of the reinvestment allowance incentive, the utility giant said in a filing with Bursa Malaysia today.
TNB said operating expenses grew by 7.5% to RM14.44 billion from RM13.43 billion, mainly due to higher generation costs, which led to a higher Imbalance Cost Pass-Through (ICPT) under recovery recognised in the quarter.
However, there was a net reversal in impairment of financial instruments amounting to RM48.7 million recognised in the current period, due to an improvement in the collection trend.
“As a result, TNB recorded a lower operating profit of RM2.08 billion, reduced by RM287.5 million from the last corresponding period,” it said.
It recorded RM171.8 million in taxes and zakat this year, down sharply from RM660.8 million in Q1 FY2022, resulting from higher utilisation of reinvestment allowance incentives. The group noted that Malaysia also imposed the one-off prosperity tax known as Cukai Makmur last year.
On its prospects, TNB said it expected a reasonable performance for 2023, having enjoyed improved Q1 earnings from electricity demand growth of 0.8%, and would continue to remain cautious about the challenges ahead including high fuel prices and inflation.
“The group will continue to take prudent measures in terms of its operational and financial requirements to ensure it remains resilient,” it added.
Boost from regional alliances
TNB has also formed strategic alliances with key energy companies in Vietnam and Laos. The partnerships aim to enhance the connectivity of the Asean Power Grid (APG) and support Malaysia’s goal of becoming a hub for renewable energy (RE) in the region.
Through these collaborations, TNB aims to expedite the efforts towards decarbonisation in the region and meet the growing need for cleaner and sustainable energy alternatives.
TNB president and CEO Baharin Din said, “By combining our strengths and expertise, we will unlock the vast RE potential in Vietnam and Laos, driving economic growth and the broader energy transition.”