Tenaga Nasional Bhd (TNB) attributed the halving of its profits from RM1.56 bil in 1Q19 to RM717.9 mil in 1Q20 to foreign currency losses, resulting from the weakening of the ringgit against the dollar and the yen.
The quarter, which ended March 31 for TNB, also saw a lower revenue year-on-year, with the current period’s revenue standing at RM11.6 bil, compared to RM13.2 bil from 1Q19.
“The movement in revenue resulted from the Imbalance Cost Pass-Through (ICPT) of a rebate position of RM307.5 mil as compared to a surcharge of RM1.37 bil reported in the last corresponding period,” said TNB.
The utility player noted that the Malaysian economy had contracted 0.7% in 1Q20, which reflected the impact of the measures taken both locally and globally to contain the spread of Covid-19, which includes the introduction of the movement control order in Malaysia. This in turn has affected the economic prospects of the nation.
Moving forward, TNB believes that economic activity will pick up in the second half of 2020, with a positive recovery in 2021.
“Given the ongoing Covid-19 pandemic and the uncertainties in the global economic environment, the board of directors foresees prolonged challenges on the group’s prospects for the financial year ending Dec 31, 2020,” said TNB, adding that the group has “taken the necessary measures” to ensure the stability of its finances and operations.
At the end of the trading day, TNB’s shares were last done at RM11.96, up 6 sen, with 4.46 million shares changing hands. – June 10, 2020
