Tenaga Posts Fourth Straight Profit on Forex Gain, Coal Costs

Tenaga Nasional Bhd., Malaysia’s biggest power producer, posted a fourth straight quarterly profit, helped by lower coal costs and foreign currency gains.

The Kuala Lumpur-based utility reported net income of 1.42 billion ringgit ($467 million), or 25.7 sen per share, for its fiscal first quarter ended Nov. 30, compared with a restated net loss a year earlier of 74.1 million ringgit, or 1.4 sen per share. Revenue climbed 5 percent to 9.1 billion ringgit on higher electricity sales, Tenaga said in a statement today.

Tenaga has been getting compensation from the government and state-owned energy group Petroliam Nasional Bhd. after disruptions in gas supply forced it to buy costlier alternative fuels to power its plants. While it didn’t book any compensation for this latest quarter, it does expect another 1 billion ringgit for the period April-July last year, Chief Executive Officer Azman Mohd told reporters in Kuala Lumpur today.

“Although Tenaga enjoyed the benefits of lower coal price which contributed in the costs of generation, the company has to be vigilant on the impact of continued use of alternative fuels on its operating expenses,” Leo Moggie, Tenaga’s chairman, told reporters at the same event. “Our plants will run on a shorter maintenance cycle which in the long run, will adversely impact our operating expenses as well as the performance of the power plants.”

First-quarter earnings were boosted by lower coal costs and a foreign currency translation gain of 397.4 million ringgit after the local currency strengthened against the dollar and yen. This compared with a forex loss of 419.1 million ringgit a year earlier, the stock exchange filing showed.

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Tenaga’s shares rose 0.6 percent to close at 6.96 ringgit in Kuala Lumpur today before the earnings release. They have climbed 14 percent over the past year, outpacing a 7.4 percent gain in the benchmark FTSE Bursa Malaysia KLCI Index.

Currently Tenaga, the government and Petroliam Nasional, or Petronas, have each been contributing one third to the power producer’s additional fuel costs. Petronas plans to address Malaysia’s gas shortage with a new liquefied natural gas import terminal in Malacca.

“The Malacca regasification terminal has been delayed to the second quarter,” Jeremy Goh, an analyst at Alliance Financial Group Bhd., said in a report before today’s results. “If it commences in June, Tenaga will remain exposed to one third of the additional cost of alternative fuels for most of its 2013 financial year.”

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