As at 10.34am, Tenaga’s shares stood at RM11.24, down 18 sen, with 2.04 million shares traded.
In a note, the research firm said the current headwinds for Tenaga include a potential demand weakness and tariff discounts, but, these would not likely have a material impact on the utility’s financials given the prevailing tariff framework.
“As the Malaysian economy grapples with the effects of Covid-19, electricity demand from the industrial and commercial segments could potentially be impacted.
“Nevertheless, Tenaga is relatively sheltered from the effects of demand fluctuations, with only the ‘customer services’ segment subjected to demand risk,” it said.
Meanwhile, as part of the 2020 Economic Stimulus Package, a couple of electricity-related measures were announced, namely the 15% tariff discount to tourism-related segments and a 2% blanket tariff discount from April to September 2020.
Tenaga estimates the total cost at RM500 mil, with the amount being entirely funded by the Electricity Industry Fund, leaving Tenaga financially neutral.
“With coal prices trending below reference year-to-date, we expect continued inflows into the Industry Fund with Tenaga likely over-recovering on generation costs,” Maybank IB said. — March 19, 2020, Bernama
