TNB expect improved economy for 2021, to see higher demand for electricity
10 May 2021
Tenaga Nasional Bhd (TNB) is optimistic that the economy will improve this year forward as compared to 2020 and the demand for electricity will pick up.
Chairman Datuk Seri Mahdzir Khalid said measures taken by the government as well as the rollout of vaccines offered a sense of optimism, and the national utility provider affirmed its support to economic recovery by continuing its investments towards the ongoing energy transition.
“TNB is also looking to further improve industry efficiencies and enhance customer experience, while continuing to promote the use of sustainable energy as we balance the grid system’s security and affordability,” Mahdzir said at the company’s 31st virtual annual general meeting (AGM) today.
“In these unusual and difficult times, our priority has been to serve the nation and rakyat, while ensuring the safety and well-being of our employees,” he said, describing 2020 as possibly the most challenging since the 2008 financial crisis.
Mahdzir also said in line with the contraction in the gross domestic product (GDP), electricity demand and sales in peninsular Malaysia decreased last year.
However, the company’s performance was still sufficiently robust to continue to honour its dividend policy of 30 to 60 per cent payout based on its adjusted net profit.
On top of the interim dividend of 22 sen per share, the board has approved a final single-tier dividend of 18 sen per share and a special dividend of 40 sen per share.
This translates into a total dividend of 80 sen per share, amounting to RM4.56 billion payout.
Meanwhile, president and chief executive officer Datuk Ir Baharin Din said TNB has continued to uphold good service, bring value to shareholders and serve the nation, amid the difficulties in 2020.
Baharin said despite the challenges, the company’s performance was commendable, supported by an agile strategy.
“Our performance this year has been the best to date. Achieving this during a global pandemic, reflects the commitment and dedication of our employees,” he said.
TNB has adopted emerging renewable energy (RE) technologies of solar, wind, biomass and biogas which translated into generation capacity of 713.2 megawatt (MW).
Smart meter installation at premises across peninsular Malaysia has reached 1.1 million as of March 2021, as TNB continues to enhance the electricity infrastructure to accommodate the integration of disruptive technologies.
Enterprising endeavour by TNB’s wholly owned subsidiary, GSPARX Sdn Bhd, meanwhile has resulted in 689 new solar panel installation contracts, contributing to a total capacity of 85 MWp of green energy.
Baharin said TNB has set the target of increasing its RE capacity to 8,300MW by 2025, driven by both domestic and international initiatives.
As of March 2021, TNB had achieved 3,402MW of RE capacity, of which 2,736MW is within Malaysia and 666MW from international, he said.
“Complementing this target, our revenue from RE is expected to continuously grow to 10 per cent in 2025 from 4 per cent in 2020.
“We also expect our revenue from our investments in energy transition (ET)-related initiatives to grow from 4 per cent to 9 per cent in 2025,” said Baharin.
He emphasised that TNB is investing an increasingly larger portion of the company’s capital expenditure (capex) on further enhancements of its grid, which plays an essential role in supporting Malaysia’s energy transition.
“Under our Grid of the Future initiative, we are increasing our capex to further enhance our infrastructure in supporting Malaysia’s energy transition.
“Our regulated capex related to enabling the energy transition is expected to increase from 12.3 to 19.3 per cent through our proposed RP3 initiatives. These investments will allow more RE integration into the system,” he added.
TNB closed the 2020 financial year with net profit of RM3.6 billion, compared to RM4.45 billion in the previous year.