Tenaga Nasional 1Q16 Earnings Fall 16%

• Tenaga Nasional’s 1Q16 net profit declined 16 percent to RM1,976 million, underpinned by foreign exchange (forex) losses and a 3.2 percent drop in revenue to RM10,676.8 million due to imbalance cost pass-through (ICPT).

• Forex lost amounted to RM58.5 million in the quarter compared to a gain of RM45.9 million in 1Q15, attributable to the continued weakening of the Malaysian ringgit.

• Excluding the ICPT over-recovery, adjusted profit after tax for 1Q16 actually recorded an improvement of 5.5 percent at RM1,630 million compared with RM1,550 million, with the growth attributable to steady unit electricity demand growth of 3.2 percent in Peninsular Malaysia.

Significance: Looking ahead, the group recognised the challenging environment it would be operating in the current financial year given the slowdown of global economy but noted it will continue to monitor its primary exposures on the short to medium term growth prospects, as well as long-term forex cost impact.