UNAUDITED FINANCIAL RESULTS 1 TENAGA NASIONAL BERHAD · tenaga nasional berhad unaudited financial results 1st quarter fy2006 25th january 2006 . agenda ... 200 3 0 400 500 1q fy'02

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TENAGA NASIONAL BERHAD

UNAUDITED FINANCIAL RESULTS 1ST QUARTER FY2006

25TH January 2006

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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”

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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

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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


PROFIT BEFORE TRANSLATION (LOSS)/GAIN RM mn

781.3 790.1 859.4984.9 922.6

130260390520650780910

1,040


OPERATING SURPLUS RM mn

(6.3)%

(47.9)%

8.1%35.0 33.7 35.3 36.8

33.7

0

20

40


EBITDA MARGIN (8.4)%%

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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

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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





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Details Of Group’s Performance

“Maintenance For A Sustainable Future”

Y.Bhg. Dato’ Che Khalib Bin Mohamad Noh President/Chief Executive Officer

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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) -

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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

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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

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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

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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

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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

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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

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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

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AGENDA





�

• 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

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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

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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.


4.593.


3.342.


3.761.

Projected Development

Value (RM mn)

Land Value (RM mn)

Dev.PeriodDev.TypeLand Size (Acres)No.

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AGENDA





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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

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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)

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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

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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

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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

UNAUDITED FINANCIAL RESULTS 1 TENAGA NASIONAL BERHAD · tenaga nasional berhad unaudited financial results 1st quarter fy2006 25th january 2006 . agenda ... 200 3 0 400 500 1q fy'02

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