Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — Investor Presentation (November 2020)
43 slides from Tenaga Nasional Bhd's investor presentation, November 2020
Slide 1: Investor Presentation
INVESTOR PRESENTATION COE – INVESTOR RELATIONS
Slide 2: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND POLICY 05 FY2020 OUTLOOK 06 APPENDIX
Slide 3: Regulatory & Shareholding Structure
INTRODUCTION TO TENAGA Regulatory & Shareholding Structure REGULATORY & SHAREHOLDING STRUCTURE LEADERSHIP POSITION PRIME MINISTER / TNB Market Cap CABINET As at 25th Nov 2020: RM62.6bn • Ranked 1st for Utilities Company • Ranked 3rd in KLCI Shareholders Policy Maker Sabah Electricity Holds Ministry
Slide 4: Regulated & Non-Regulated Business
INTRODUCTION TO TENAGA Regulated & Non-Regulated Business Generation Grid/Transmission Distribution Network & Retail Non-Regulated Business Regulated Business TNB Generation Mix: Installed Capacity: Distribution Network Length: Core Business 25,122MW Transmission Network Length: 683,008KM Solar 0.1%
Slide 5: Introduction to Tenaga
INTRODUCTION TO TENAGA Vertically integrated utility company serving more than 9mil customers throughout Peninsula Malaysia TNB Sectoral Sales Analysis* 0.9% 1.6% 2.1% Total 82,283.6 GWH Unit Sold 24.0% 27.5% Total RM180.5bn Assets 81.8% 38.3% 32.4% Total TNB: 9.3mn Customers SESB: 0.6 mn 36.0% 38.0
Slide 6: Electricity demand in line with GDP
INTRODUCTION TO TENAGA Electricity demand is in line with GDP; 3QFY’20 maximum demand neared prior year level reflects improved economic traction TNB (Peninsula) Maximum Demand 3QFY’20 3QFY’19 Variance (%) Maximum 16,570 16,894 (1.9) Demand (GWh) TNB (Peninsula) Yearly Peak Demand MW * 18,808 18,566
Slide 7: TNB's global presence in six countries
INTRODUCTION TO TENAGA TNB’s global presence in six countries • 55% equity ownership in Vortex Solar Investments S.à.r.l, United 24 operational solar PV farm portfolio of 365MW (May 2017) Kingdom United • Tenaga Wind Ventures UK Ltd, 53 operational onshore wind Kingdom portfolio of 26.1MW (Feb 2018)
Slide 8: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND POLICY 05 FY2020 OUTLOOK 06 APPENDIX
Slide 9: Incentive Based Regulation (IBR)
INCENTIVE BASED REGULATION (IBR) A Mechanisms For Tariff Setting With Incentives To Improve Efficiency & Greater Transparency Non – Regulated Regulatory Environment: (competitive bidding environment) 1. Clear and Transparent Regulatory Framework Clear and transparent regulatory framework governed by
Slide 10: Incentive Based Regulation (IBR)
INCENTIVE BASED REGULATION (IBR) Regulatory Period 2 Average AverageTariff Tariffby by Entities (sen/kwh) Entities (sen/kWh) Fuel Parameters Base COAL USD75/MT (RM14.47/mmbtu @ RM4.212/USD) Base tarifftariff for RP2for RP2 (sen/kWh) (sen/kWh) RP1 : USD87.5.MT @ RM3.100/USD LNG RM35/mmbtu RP1 : RM41.
Slide 11: Interim Year 2021 Regulatory Period Timeline
INCENTIVE BASED REGULATION (IBR) Interim Year 2021 Regulatory Period Timeline INTERIM YEAR RP2 (2018 – 2020) 2021 RP3 (2022 – 2024) 2018 2019 2020 2021 2022 2023 2024 ➢ Energy Commission (EC) has agreed for RP3 to be in 2022-2024, and RP2 to be extended (FY2021 – Interim year). ➢ This is to allow TN
Slide 12: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND POLICY 05 FY2020 OUTLOOK 06 APPENDIX
Slide 13: Reimagining TNB: 4 Strategic Pillars
REIMAGINING TNB TNB's strategic aspiration – a key enabler is the corporate structure 4 STRATEGIC PILLARS 4 STRATEGIC PILLARS Future Generation Grid of the Future Future Winning the Customer Sources Proof Regulations • Growing TNB’s renewable capacity • Upgrading existing network • Enhance experienc
Slide 14: Reimagining TNB: TPGSB uplift strategies
REIMAGINING TNB TPGSB’s three key uplift strategies focusing on performance, growth & efficiency Performance & Growth Efficiency Performance • Turnaround • Digital • Productivity • Achieve high reliability for key • Unlock asset potential and • Implement digital strategy and • Enhance workforce asse
Slide 15: Leading provider of sustainable energy solutions
TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Our pledge in powering the lives of our customers and communities through renewable energy, supporting Malaysia’s commitment in reducing the GHG emission intensity and environmental impact Government Green Devel
Slide 16: Journey towards cleaner and sustainable energy provider
TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Our journey towards transitioning into a cleaner and sustainable energy provider TNB’s RE Capacity TNB’s RE Strategy WIND International: International • UK (TNB Wind Ventures): 26 MW 144 MW 1) Renewable Energy D
Slide 17: Towards 2025 renewable energy growth ambitions
TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Towards 2025, TNB will aim to grow its renewable energy business in specific markets by leveraging on its international and domestic assets, capabilities and experience Ground Zero 0 Value Protection & Creation
Slide 18: Transitioning away from coal related revenue
TRANSITIONING AWAY FROM COAL RELATED REVENUE The group aspires to ensure that the revenue from the coal generation plants does not exceed 25% Breakdown of TNB's Group Revenue 0.2% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 2.6% 2.4% 2.7% 2.7% 2.6% 2.0% 1.8% 1.7% 12.6% 13.0% 10.8% 10.5% 11.0% 10.4% 11.4% 13.
Slide 19: TNB's Environmental Initiatives
TNB’S ENVIRONMENTAL INITIATIVES TNB board of directors is cognisant of the importance of ensuring sustainability is integrated in the strategic direction of the organisation, decision making processes and operational performance Developed Green House Gas Emission The latest coal generation plants us
Slide 20: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND POLICY 05 FY2020 OUTLOOK 06 APPENDIX
Slide 21: Dividend Policy
DIVIDEND POLICY Distribution of dividend is based on 30% to 60% dividend payout ratio, based on the reported Consolidated Net Profit Attributable to Shareholders After Minority Interest, excluding Extraordinary, Non-Recurring items Current dividend policy effective FY2017 25% 27% 25% 50% 50% 56% 59%
Slide 22: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND POLICY 05 FY2020 OUTLOOK 06 APPENDIX
Slide 23: FY2020 Outlook
FY2020 OUTLOOK • After RMCO was announced in June 2020, demand and sales have improved between the period as almost all business are allowed to operate. • However in October, sales slightly decreased in commercial and domestic sectors. Electricity • We will continuously monitor the demand and sales
Slide 24: FY2020 Outlook
FY2020 OUTLOOK • For 2020, we will be executing a strategy aimed at either protecting or creating value, mainly focusing on growing TNB’s international Renewable Energy business leveraging on existing assets, capabilities and experience. • Our immediate strategy is to grow TNB’s international Renewa
Slide 25: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND POLICY 05 FY2020 OUTLOOK 06 APPENDIX
Slide 26: TNB Shareholding Structure
APPENDIX TNB Shareholding Structure Top 10 KLCI Stocks by Market Capitalisation RM bil Khazanah Nasional Berhad 18.5 Maybank 93.3 (3.9%) 97.1 Permodalan Nasional Berhad 17.4 (PNB) 73.4 17.5 Public Bank (2.8%) 75.5 15.5 Employees Provident Fund Board (EPF) TNB 65.2 (13.6%) 75.4 5.6 7.1 Kumpulan Wang
Slide 27: Higher electricity demand supported by industrial and commercial sector
APPENDIX Higher electricity demand was supported by industrial and commercial sector in 3Q 3Q main contributors for the drop Commercial Industrial Industrial: Y-o-Y (10.2%) Y-o-Y (12.5%) • Iron and steel • Cement products • Electric & electronic (0.1%) (28.3%) (8.4%) (7.5%) (22.7%) 0.2% Commercial:
Slide 28: IBR – ICPT Mechanisms
APPENDIX Incentive Based Regulation (IBR) – Imbalance Cost Pass-Through (ICPT) Mechanisms Ensures TNB Remain Neutral Base Tariff under IBR framework comprises of: a) Opex, Depreciation of Regulated Assets & Tax Expenses of Business Entities - transmission, grid system operation, Single Buyer operati
Slide 29: IBR – New Features in Tariff Review for RP2
APPENDIX Incentive Based Regulation (IBR) – New Features in Electricity Tariff Review for RP2 (2018-2020) * Source: Energy Commission (EC) 29 29
Slide 30: IBR – IBR Entities
APPENDIX Incentive Based Regulation (IBR) – IBR Entities 1 1 In RP1, these 2 entity are grouped as Price –Cap entity Source: Energy Commission (EC) 30 30
Slide 31: IBR – ICPT Comprises Two Components
APPENDIX Incentive Based Regulation (IBR) – Imbalance Cost Pass-Through (ICPT) Comprises Two Components Imbalance Cost Pass-through (ICPT) Fuel Cost Pass Through (FCPT) Generation Specific Cost Adjustment (GSCPT) Changes in Gas/LNG and Coal Costs Changes in: PPAs Power Purchase Agreements • Other fu
Slide 32: IBR – Generation and Customer Mix
APPENDIX Incentive Based Regulation (IBR) – Generation and Customer Mix Generation Mix RP1 vs RP2 Changes in Customer Mix (%) in RP1 (2015-2017) RP1 Base RP1 Actual 43.6% 40.8% Coal Coal 44% 49% 35.1% RP2 1% 1% 0.1% 34.1% 4% Coal Gas 20.6% 22.3% 33% Hydro 61% RE Base IBR RP1 Average Actual IBR RP1 L
Slide 33: Existing TNB Renewable Energy Assets
APPENDIX Existing - TNB’s Renewable Energy (RE) Assets Others Domestic (Peninsular Malaysia) International ⚫ Mini Hydro (22MW) Kelantan ⚫ GSPARX Rooftop Solar (73MW) United Kingdom (Total secured) Large Hydro ⚫ SJ Pergau (600MW) Solar ⚫ TNB Vortex Solar (365.0MW) Kedah Terengganu Wind Large Scale So
Slide 34: International Acquisitions
APPENDIX International Acquisition - Four International Acquisitions to Support Aspiration 30% 30% Equity interest of GAMA Enerji A.S. Equity interest of GMR Energy Limited. Assets include a 853MW natural gas-fired plant, Assets include 1,915MW coal, gas and solar plants. 117.5MW wind plants and 131
Slide 35: TNB's Environmental Initiatives - Green Development
APPENDIX TNB’s Environmental Initiatives - Green Development ❑ UNITEN’s Smart UniverCity ❑ Expansion of Electric Vehicle Charging Network ✓ To create a sustainable ecosystem which provide competitive advantage for TNB in moving into smart city environment. ✓ To expand the existing charging station i
Slide 36: TNB's Social Initiatives
APPENDIX TNB’s Social Initiatives Economic & Social Education Career Development 212 households benefitted from 700 students awarded YTN More than RM183mn Projek Baiti Jannati and Program scholarship with a total contributed in Mesra Rakyat by refurbishing or amount of RM66.1mn training & developmen
Slide 37: TNB's Governance Initiatives
APPENDIX TNB’s Governance Initiatives TNB is committed to operating in an ethical, transparent and responsible manner given the critical role we play in national development and the number of stakeholders who are impacted by our business TNB Board Committees Governance Pillars Board Audit Committee
Slide 38: Composition of BOD
APPENDIX TNB’s Governance Initiatives - Composition of BOD CHAIRMAN EXECUTIVE DIRECTOR / CEO DATO’ SERI DIRAJA MAHDZIR KHALID DATUK SERI AMIR HAMZAH BIN AZIZAN Independent Non-Executive Directors (Total = 7) Non-Independent Non-Executive Directors (Total =2) NORAINI BINTI CHE DAN ONG AI LIN GOPALA K
Slide 39: Total debt and gearing
APPENDIX Increased in total debt due to drawdown of new sukuk, however gearing within optimal level Statistics 30 th Sept'20 31 st Dec'19 1 Total Debt (RM' Bil) 51.1 45.4 RM Equivalent of Loan Value (bn) Net Debt (RM' Bil)* 35.5 31.2 1 Gearing (%) 47.8 43.4 74.8% Net Gearing (%) 33.3 29.8 Fixed : Fl
Slide 40: Financial Highlights
APPENDIX Financial Highlights REVENUE (RM bil) EBITDA (RM bil) 50.4 50.9 44.5 47.4 18.4 33.7 14.8 15.5 13.4 13.8 FY'16 FY'17 FY'18 FY'19 9MFY'20 FY'16 FY'17 FY'18 FY'19 9MFY'20 PAT (RM bil) 7.32 6.91 4.45 3.75 2.41 FY'16 FY'17 FY'18 FY'19 9MFY'20 Note: FY2019 is after MFRS16 implementation 40 40
Slide 41: Technical Highlights
APPENDIX Technical Highlights EAF (%) Transmission System Minute (mins) 04 05 89.9 1.5 88.1 88.5 88.3 83.4 0.4 0.3 0.2 0.1 FY'16 FY'17 FY'18 FY'19 9MFY'20 FY'16 FY'17 FY'18 FY'19 9MFY'20 Distribution SAIDI (mins) 49.7 50.2 48.2 48.1 33.9 FY'16 FY'17 FY'18 FY'19 9MFY'20 41 41
Slide 42: Disclaimer
DISCLAIMER All information contained herein is meant strictly for the use of this presentation only and should not be used or relied on by any party for any other purpose and without the prior written approval of TNB. The information contained herein is the property of TNB and it is privileged and c
Slide 43: Thank You
THANK YOU For further enquiries, kindly contact us at: Investor Relations Office: Investor Relations Team: Ms. Mehazatul Amali Meor Hassan CoE Investor Relations +603 2108 2126 Group Finance Division Tenaga Nasional Berhad [email protected] 4th Floor, TNB Headquarters Ms. Sakinah Mohd Ali No.129,
Tenaga Nasional Berhad — Investor Presentation (November 2020) on 6ix