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�
TENAGA NASIONAL BERHAD
UNAUDITED FINANCIAL RESULTS 1ST QUARTER FY2006
25TH January 2006
�
AGENDA
� Highlights Of Group’s Performance
� Details Of Group’s Performance
� Recent Developments
� Tenaga’s Strategy For FY’06
�
Y.Bhg. Tan Sri Datuk Amar Leo Moggie
CHAIRMAN
Highlights Of Group’s Performance
“One Team One Spirit One Goal”
�
1H FY’05
Revenue
Operating Expenses
Translation (loss)/gain
Finance Cost
RM mn
Operating Surplus
Other Operating Income
1Q FY’061Q FY’05
4,544.8 8.1
(3,647.4) 12.2
182.6
11.4
4,911.4
(4,092.4)
(403.1)
362.5(438.8)
(6.3)922.6984.9
(361.8)
103.687.5 18.4
Highlights……..
Changes(%)
Profit Before Tax & Translation (loss)/gain (41.0)386.4655.3
Transaction Loss (3.3) (140.9) 4,169.7
Profit Before Translation (loss)/ gain (47.9)233.1
Total Profit
447.3
8.5 595.6 6,907.1
�
3,809.8 4,055.9 4,243.94,544.8
4,911.4
1,000
2,000
3,000
4,000
5,000
1Q FY'02 1Q FY'03 1Q FY'04 1Q FY'05 1Q FY'06
REVENUE RM mn
Financial Performance Trend
339.1 369.7 356.3447.3
233.1
100
200
300
400
500
1Q FY'02 1Q FY'03 1Q FY'04 1Q FY'05 1Q FY'06
PROFIT BEFORE TRANSLATION (LOSS)/GAIN RM mn
781.3 790.1 859.4984.9 922.6
130260390520650780910
1,040
1Q FY'02 1Q FY'03 1Q FY'04 1Q FY'05 1Q FY'06
OPERATING SURPLUS RM mn
(6.3)%
(47.9)%
8.1%35.0 33.7 35.3 36.8
33.7
0
20
40
1Q FY'02 1Q FY'03 1Q FY'04 1Q FY'05 1Q FY'06
EBITDA MARGIN (8.4)%%
�
67.8
30.7 34.126.1
40.1
18.5
0.0
20.0
40.0
60.0
80.0
FY'01 FY'02 FY'03 FY'04 FY'05 1QFY'06
*4.2 4.2 4.1 4.4 *4.1 4.1
0
2
4
6
FY'01 FY'02 FY'03 FY'04 FY'05 1QFY'06
4.0
1.7 1.81.3
2.0
3.8
0
1
2
3
4
5
FY'01 FY'02 FY'03 FY'04 FY'05 **1QFY'06
ROA (%)
Sustainable Performance Reflected In Financial Ratios
63.167.3 68.8 68.6
64.9 63.1
0
20
40
60
80
FY'01 FY'02 FY'03 FY'04 FY'05 1QFY'06
Debt to Total Capital (%)
Basic Earnings Per Share (Sen) Interest Coverage (X)
*Excludes USD bond refinancing costs**Annualised figure
�Note: TNB’s, AGL’s and TEPCO’s figure are based on FY’05. Other utilities are based on FY’04
Source: Citigroup
Return On Invested Capital (%)
����
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0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
AGL TEPCO TataPower
TNB CLP KEPCO Datang EGCO
EBITDA Margin (%)
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0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
TEPCO KEPCO TNB Datang AGL CLP TataPower
EGCO
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0
2
4
6
8
10
12
14
16
TNB TataPower
EGCO TEPCO AGL CLP Datang KEPCO
Interest Coverage (x)
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0
20
40
60
80
CLP TataPower
AGL KEPCO EGCO Datang TNB TEPCO
Debt to Total Capital (%)
…Benchmarked Against Other Utilities
�
0
2,000
4,000
6,000
8,000
10,000
12,000
Industrial Commercial Domestic *Others
1Q'FY05 1QFY'06
0
400
800
1,200
1,600
2,000
Industrial Commercial Domestic *Others
1Q FY'05 1Q FY'06
(GW
h)
40.9%
Y-o-Y unit growth = 4.8%
(2.4) %
9.5%
11.4%
25.0%
(RM
mn)
2.0%
9.6%
12.1%
Y-o-Y revenue growth = 8.0%
76% Of Revenue From Industrial & Commercial Sectors…
1Q FY’05 Total 19,253.9 GWh1Q FY’06 Total 20,173.9 GWh
1Q FY’05 Total RM4,396.3 mn1Q FY’06 Total RM4,746.2 mn
* Others include public lighting, mining, EGAT and LPL sales
Credit Notes raised :- YTD FY’05 - RM91.1 mnYTD FY’06 – RM18.2 mn
AGENDA
� Highlights Of Group’s Performance
� Details Of Group’s Performance
� Recent Developments
� Tenaga’s Strategy For FY’06
�
Details Of Group’s Performance
“Maintenance For A Sustainable Future”
Y.Bhg. Dato’ Che Khalib Bin Mohamad Noh President/Chief Executive Officer
��
1Q FY’061Q FY’05 Changes (%)
� IPP
� Fuel
� Staff 388.3
� Depreciation
� Others
395.9 2.0
688.7 734.4 6.6
100.3 450.2 348.9
Operating Expenses (RM mn)
Operating Expenses Reflect Increases in Fuel Cost & R&M
1,608.1 1,547.2 (3.8)
701.0 903.6 28.9
� R&M 161.0 199.2 23.7
TOTAL OPERATING EXPENSES 3,647.4 4,092.4 12.2
� Fuel Subsidy - SESB - (138.1) -
��
Cost Snapshot…………..
8.4 7.7
3.60.8 1.02.0 2.0
3.6 3.60.5
*3.8
2.2
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18.9 20.3
44.1 37.8
4.44.9
10.69.7
18.917.9
11.0
18.719.2
2.8
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Sen/
kWh
%
of T
otal
Op.
Cos
t
Depreciation IPP Fuel R&M Staff Cost Others
20.318.9
1Q FY’061Q FY’051Q FY’041Q FY’031Q FY’02COST PER UNIT SOLD (sen/kWh) 19.6 19.8 19.7
*Net of fuel subsidy received for SESB of RM138.1 mn
��
Cost Snapshot (Before Provisioning)
8.4 7.7
3.60.8 1.02.0 2.0
3.6 3.61.0
*3.8
1.3
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19.4 19.4
43.0 39.7
4.3 5.110.4 10.1
18.4 18.85.1 6.7
19.618.8
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Sen/
kWh
%
of T
otal
Op.
Cos
t
Depreciation IPP Fuel R&M Staff Cost Others
19.419.4
1Q FY’061Q FY’051Q FY’041Q FY’031Q FY’02COST PER UNIT SOLD (sen/kWh)
19.5 19.5 19.5
*Net of fuel subsidy received for SESB of RM138.1 mn
��
Gas (TNB, SESB, LPL)48.8%
Coal39.8%
Hydro9.2%
Oil2.0%
Distillate0.2%
TNB GROUP GENERATION 1Q FY’06 = 12,885.6 GWh
Gas (TNB, SESB,LPL)
43.7%
Hydro12.5%
Oil1.2%
Coal42.6%
TNB GROUP GENERATION 1Q FY’05 = 11,157.6 GWh
Fuel Cost Impacted By Coal Prices & Gas Curtailment
Coal46.0%
Gas43.6%
Oil 9.1%
Distillate1.3%
FUEL COST 1Q FY’06 = RM903.6 mn
Avg. Coal Price 1Q FY’06 =USD52.5/-per metric tonne
Distillate0.7% Oil
7.7%
Coal50.6%
Gas41.0%
FUEL COST 1Q FY’05 = RM701.0 mn
Avg. Coal Price 1Q FY’05 =USD49.8/-per metric tonne
��
Gas IPP40.9%
Distillate0.4%
Oil2.4%
Coal22.9%
Hydro5.3%
Gas (TNB, SESB, LPL)
28.1%
INDUSTRY GENERATION1Q FY’06 = 22,422.1 GWh
Gas IPP47.0% Gas (TNB,
SESB,LPL)22.7%
Coal22.1%
Oil1.7%
Hydro6.5%
INDUSTRY GENERATION1Q FY’05 = 21,487.2 GWh
Achieving Optimal System Mix
��
RM
bn
0
0.5
1
1.5
2
FY'02 FY'03 FY'04 FY'05 1Q FY'06
Generat io n T ransmissio n D ist r ib ut io n SESB Ot hers
4.5 3.7 4.5
Annual CAPEX Program
4.0 0.6
1.6
0.9
1.7
0.2
1.4
0.4
1.6
0.1
1.7
1.11.3
0.1
1.0 1.0
1.5
0.3
0.10.2 0.3
0.2 0.060.20.3
0.040.03
��
Cash Surplus Sufficient For Capex In FY’06
2,309.7
3,611.9
5,921.6
FY’05
1,012.91,254.81,019.7959.6SURPLUS
620.73,982.63,114.54,072.7Capex
1,633.65,237.44,134.25,032.3Cashflow From Operations (before debt servicing and capex)
1Q FY’06FY’04FY’03FY’02RM mn
��
Managing Debt Exposure
*Total Debt = RM28.9 bnFixed 88.3% :11.7%
Effective Weighted Average Cost of Debt 5.70%
1Q FY’06
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*Total Debt = RM29.9 bnFixed 87.1% : 12.9%
Effective Weighted Average Cost of Debt 5.35%
31st August 2005
* In accordance with MASB 24
1Q FY’06 RM’bn GEARING
TOTAL 28.9 1.7
CASH 2.8
NET BORROWINGS 26.1 1.5
�
AGENDA
� Highlights Of Group’s Performance
� Details Of Group’s Performance
� Recent Developments
� Tenaga’s Strategy For FY’06
�
• TNB shareholders at the EGM on 15th December 2005 approved the bonus issue of up to 900,566,295 new ordinary shares of RM1.00 each in TNB to be credited as fully paid up, on the basis of 1 new TNB Share for every 4 existing TNB shares held on an entitlement date to be determined and announced later (“Bonus Issue”)
• Approval for the bonus issue was granted by Bursa Malaysia Securities Berhad on 28 December 2005
• The bonus issue will be implemented via the capitalisation of the share premium account of TNB
• The company is currently in the midst of implementing the Bonus Issue and is expected to be completed by early March 2006
Bonus Issue
��
Status On Shuaibah Phase 3
Incorporation of Saudi-Malaysia Water & Electricity Co. Ltd ( SAMAWEC ) to undertake proposed investment
Execution of project documents
Execution of financing documents for the project
Financial close
• 26th October 2005
• 15th November 2005
• 21st December 2005
• 24th December 2005
Total project cost to be funded by a multi-tranchefinancing on a debt equity ratio of 80:20
USD2.5 bn
TNB’s 6% effective equity interest in the Project Company USD33.5 mn
��
Value Creation From Landbank
17.2
Book Value (RM mn)
81.09.011
Indicative Value
(RM mn)
Area(Acres)
No Of Plots
Proposed Properties For Disposal
Proposed Joint Development Of Land
420106.314.85TOTAL
6020.64-6 years Residential (High end)
3.164.
8030.04-6 years Residential (High end)
4.593.
13026.24-6 years Residential (High end)
3.342.
15029.54-6 years Residential (High end)
3.761.
Projected Development
Value (RM mn)
Land Value (RM mn)
Dev.PeriodDev.TypeLand Size (Acres)No.
��
AGENDA
� Highlights Of Group’s Performance
� Details Of Group’s Performance
� Recent Developments
� Tenaga’s Strategy For FY’06
��
Road Map For FY’06 - “Maintenance For A Sustainable Future”
• Revamp of Customer Call Management Center (CMC)- Migration from 13 centers to 4 regional centers - upgrade to full fledged contact center - field force automation
• Installation of RMR devices• SEAL teams’ ongoing efforts
Improve Customer Service
Service Excellence in G, T & D
• Improve generation market share • Improve system reliability • Service level agreement – REHDA• Customer Charter & Distribution Code
Effective Maintenance Program
• Proactive rather than reactive • Instill strong maintenance culture throughout the Group
Further Cost Management Initiatives
• e-banking platforms – reduce transaction costs and minimise “float money” –estimated savings of RM5 mn per month
• Strategic procurement for capex and opex – PC & peripherals hardware –savings of 30% from retail price
• Vendor financing – cheaper cost of borrowing for vendors with savings passed onto TNB
��
Housekeeping • Review /revamp procurement policy – a GLC transformation
initiative• Cost management rationalisation• Streamlining processes & procedures – PSI : ISO certification for company
Rebalance Capital Structure/ DLM
• Balance sheet design • Refinancing RM debt and lock in current interest rates• Reducing foreign currency exposure• Review of working capital
Value Creation• Landbank – Development /Sale• Upgrade of Thai /Malaysian Interconnection with potential to increase sales
to EGAT• Improve collections
Human Capital• Succession plan • Increasing productivity• Instill employee values on the acceptance of “keeping the lights on”• Aggressive Transformation vs Organic Transformation • “One Team. One Spirit. One Goal”
“Maintenance For A Sustainable Future”…. (cont’d)
��
Cost Management & Efficiency Drivers FY’06
Recovery of Theft Backbilling
Reduction In General Expenses
Value Creation From Landbank
SESB Turnaround (Diesel Subsidy)
Reduction in T&D Losses (10.5% to 9.5%)
Recovery from Delinquent Accounts
Manage Overtime Claims Paid
Manage Medical Claims Paid
TOTAL
Initiatives Target FY’06
ActualFY’05
20.0-
22.5225.0
Identified
100.7 50.0
30.0
300.0
300.012 months
145.6 recognised
339.3 billed for 15 months
FINANCIALS
130.0
RM mn
60.0
130.0
-
1Q FY’06
7.641.3
Identified
138.1 recognised
90.4 billed for 3 months
208.9
10.3
169.8
82.2
(47.1)
-
(8.0)
(13.3)
(15.3)
(26.2)
566.2 600.0
NOTE : ( ) indicates increases
10.05% reduction
of FY’05
No Increase
��
Cost Management & Efficiency Drivers FY’06
Generation Availability
Unplanned Outage Rate (UOR)
SAIDI (Minutes)
System Minutes
Reduction in ACP :(Pen. Malaysia)
TECHNICALS
Initiatives Target FY’06
ActualFY’05
148
14
86.5%
5.0%
133
10
85.6%
6.1%
32 days*34 days
NOTE: *Excluding PLMAH
��
Cost Management & Efficiency Drivers FY’06
OTHERS
InitiativesTarget FY’06
ActualFY’05
Debt Mix (%)(RM vs Other Currencies)
Gearing (%)
Reducing Procurement Process Time (Closing of Tenders)
63
51:49
65
80% in 90 days
90% in 90 days
51:49
63
78% in 90 days
1Q FY’06
57:43
�
Thank You
Powering The Nation’s Progress
www.tnb.com.my