Tenaga Nasional Bhd · MYX:TENAGA
Tenaga Nasional Bhd — Investor Presentation (March 2021)
41 slides from Tenaga Nasional Bhd's investor presentation, March 2021
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 05 FY2021 OUTLOOK 06 APPENDIX 2
Slide 3: Regulatory & Shareholding Structure
INTRODUCTION TO TENAGA Regulatory & Shareholding Structure REGULATORY & SHAREHOLDING STRUCTURE LEADERSHIP POSITION PRIME MINISTER / TNB Market Cap CABINET As at 3rd March 2021: RM58.9bn • Ranked 1st for Utilities Company • Ranked 4th 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 25,212MW Transmission Network Length: 683,008KM Solar 0.1%
Slide 5: Vertically integrated utility serving more than 9mil customers
INTRODUCTION TO TENAGA Vertically integrated utility company serving more than 9mil customers throughout Peninsula Malaysia TNB Sectoral Sales Analysis* 1.0% 1.4% 2.1% Total 110,739.0 GWH Unit Sold 23.5% 27.1% Total RM181.4bn Assets 81.8% 38.3% 32.1% Total TNB: 9.4mn Customers SESB: 0.6 mn 36.7% 38.
Slide 6: Y-o-Y electricity demand contracted in tandem with GDP
INTRODUCTION TO TENAGA Y-o-Y electricity demand contracted in tandem with GDP TNB (Peninsula) Maximum Demand GDP & TNB (Peninsula) Demand Growth 5.9 % 4QFY’20 4QFY’19 Variance (%) 5.0 4.7 4.3 4.2 Maximum 18,037 17,680 2.0 Demand (GWh) 2.5 2.5 3.2 2.7 2.2 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 TNB (Peni
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 05 FY2021 OUTLOOK 06 APPENDIX 8
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) - RP2 Extension Year
INCENTIVE BASED REGULATION (IBR) Regulatory Period 2 (RP2) Extension Year (2021) Average AverageTariff Tariff by Entities Entities(sen/kWh) (sen/kwh) Fuel Parameters COAL USD67.45/MT @ RM4.212/USD RP2 : USD75.00/MT (RM14.47/mmbtu @ RM4.212/USD) REGULATED RM27.20/mmbtu (Jan’21 – Dec’21) GAS RP2 : RM2
Slide 11: Regulatory Period Timeline
INCENTIVE BASED REGULATION (IBR) Regulatory Period 2 (RP2) Extension Year (2021) Regulatory Period Timeline INTERIM YEAR RP2 (2018 – 2020) 2021 RP3 (2022 – 2024) 2018 2019 2020 2021 2022 2023 2024 ➢ The Government has approved a one-year extension of the Second RP2 of the IBR for year 2021 ➢ Beginni
Slide 12: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND 05 FY2021 OUTLOOK 06 APPENDIX 12
Slide 13: Sustainability: Industry landscape evolving
SUSTAINABILITY Electricity industry continues to evolve, creating new opportunities and pushing the boundaries for innovation Inevitable Changes in Industry Landscape Emergence of Disruptive Changing Customers’ Global Energy Transition Expectations Technologies ▪ Climate change drives greater ▪ Disr
Slide 14: Sustainability: Leading provider of sustainable energy solutions
SUSTAINABILITY As the primary driver of the nation's Energy Transition, TNB has a pivotal role in spearheading an evolving industry TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Future Generation Sources Grid of the Future Winning the Customer Future Proof
Slide 15: Ambitious renewable energy targets
SUSTAINABILITY The increasing emphasis on Sustainable Energy sets the tone for ambitious RE targets Progress 32% of TNB’s capacity target by 2025 i. Currently in discussion with EC on the terms and condition for Nenggiri large Domestic hydro plant (300MW) 8,300MW ii. GSPARX - Total 81 MW (secured ca
Slide 16: Investment in regulated infrastructure for energy transition
SUSTAINABILITY Investment in infrastructure for regulated business is key towards catalysing a sustainable energy ecosystem kWh Regulated businesses spends on average ~16% of its CAPEX towards supporting Energy Transition DN is the largest contributor to the Group’s overall EBIT target by 2025 of RM
Slide 17: Empowering customer participation in the Energy Transition
SUSTAINABILITY TNB is empowering customer participation in the Energy Transition and paving the way for electrification efforts ▪ Facilitates the implementation of the Net Energy Metering (NEM) scheme and the Supply Agreement for Renewable Energy (SARE) ▪ Rooftop PV: Total 81 MW (secured capacity) a
Slide 18: Corporate Responsibility pillars
SUSTAINABILITY TNB continues its Nation-Building legacy through Corporate Responsibility pillars anchored on empowering communities for a better, brighter Malaysia Education ▪ My Brighter Future ▪ Yayasan Tenaga Nasional ▪ We believe that education can transform lives of not just one individual but
Slide 19: Corporate governance standards
SUSTAINABILITY TNB upholds the highest standards of corporate governance embedded in a culture that values ethical behaviour, integrity and sustainability ▪ Main Market Listing Requirements of Bursa Malaysia Securities Berhad TNB Corporate ▪ Malaysian Code on Corporate Governance 2017 Governance Fra
Slide 20: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND 05 FY2021 OUTLOOK 06 APPENDIX 20
Slide 21: Dividend
DIVIDEND 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% 56% 56% 59% 140.0
Slide 22: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND 05 FY2021 OUTLOOK 06 APPENDIX 22
Slide 23: FY2021 Outlook: Electricity demand
FY2021 OUTLOOK • Under RP2 extension year, our approved demand forecast is 113,909 GWh or 2.9% growth compared to JPPPET revised FY2020 forecast. • Given that most of the Industrial and Commercial sectors are allowed to operate during MCO 2.0, we expect the impact of the Electricity lockdown to the
Slide 24: FY2021 Outlook: RP2 extension parameters
FY2021 OUTLOOK • On 23rd Dec’20, EC had approved the RP2 Extension parameters under the IBR framework. This extension instils confidence on the effectiveness of the IBR mechanism to maintain stability in the power industry. • The RP2 Extension approved parameters are fair and transparent. Our Regula
Slide 25: FY2021 Outlook: International business
FY2021 OUTLOOK • For 2021, we will be executing a strategy aimed at protecting value from existing assets, which includes Liberty, Shoaiba, GEAS and GEL and creating value for performing assets (Vortex and TWV). • Part of this strategy involves executing a plan focusing on growing TNB’s internationa
Slide 26: Agenda
01 INTRODUCTION TO TENAGA 02 REGULATORY AGENDA 03 BUSINESS STRATEGY & DIRECTION 04 DIVIDEND 05 FY2021 OUTLOOK 06 APPENDIX 26
Slide 27: TNB Shareholding Structure
APPENDIX TNB Shareholding Structure Top 10 KLCI Stocks by Market Capitalisation RM bil Khazanah Nasional Berhad 18.5 Maybank 95.1 (2.1%) 97.1 Permodalan Nasional Berhad 17.7 (PNB) Public Bank 80.0 +6.0% 17.5 75.5 15.5 Employees Provident Fund Board (EPF) TNB 59.4 (21.2%) 75.4 5.6 Kumpulan Wang Persa
Slide 28: Electricity Demand By Sectors
APPENDIX Electricity Demand By Sectors – Lower electricity demand mainly from sluggish industrial and commercial sectors 4Q main contributors for the drop Commercial Industrial Industrial: Y-o-Y (7.6%) Y-o-Y (12.1%) • Iron and steel • Cement products • Edible oil products (0.1%) (28.3%) (8.4%) (10.7
Slide 29: IBR - Imbalance Cost Pass-Through 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 30: 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) 30 30
Slide 31: 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) 31 31
Slide 32: 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 33: 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 34: Sustainability: Journey towards cleaner energy provider
APPENDIX Sustainability – Our journey towards transitioning into a cleaner and sustainable energy provider TNB’s RE Capacity TNB’s RE Strategy International: WIND ▪ UK (TNB Wind Ventures): 26 MW International 144 MW ▪ Turkey (GAMA): 118 MW 1) Renewable Energy Driver (UK / Europe) Update: 2) Growing
Slide 35: TNB's Renewable Energy Assets
APPENDIX Sustainability – TNB’s Renewable Energy (RE) Assets Others Domestic (Peninsular Malaysia) International ⚫ Mini Hydro (22MW) Kelantan ⚫ GSPARX Rooftop Solar (81MW) United Kingdom (Total secured) Large Hydro ⚫ SJ Pergau (600MW) Solar ⚫ TNB Vortex Solar (365.0MW) Kedah Terengganu Wind Large Sc
Slide 36: Composition of BOD
APPENDIX Sustainability (Governance) – Composition of BOD CHAIRMAN EXECUTIVE DIRECTOR / CEO DATO’ SERI DIRAJA MAHDZIR KHALID DATUK IR. BAHARIN BIN DIN Independent Non-Executive Directors (Total = 7) Non-Independent Non-Executive Directors (Total =2) NORAINI BINTI CHE DAN ONG AI LIN GOPALA KRISHNAN A
Slide 37: Gearing
APPENDIX Gearing – Increased in total debt due to drawdown of new sukuk, however capital headroom remains healthy Statistics 31st Dec'20 31st Dec'19 RM Equivalent of Loan Value (bil) 1 Total Debt (RM' Bil) 49.5 45.4 Net Debt (RM' Bil)* 36.0 31.2 1 Gearing (%) 46.3 43.4 Net Gearing (%) 33.7 29.8 74.7
Slide 38: Financial Highlights
APPENDIX Financial Highlights REVENUE (RM bil) EBITDA (RM bil) 44.5 47.4 50.4 50.9 44.0 14.8 15.5 13.4 18.4 18.0 FY'16 FY'17 FY'18 FY'19 FY'20 FY'16 FY'17 FY'18 FY'19 FY'20 PAT (RM bil) 7.32 6.91 3.75 4.45 3.62 FY'16 FY'17 FY'18 FY'19 FY'20 Note: FY2019 is after MFRS16 implementation 38 38
Slide 39: Technical Highlights
APPENDIX Technical Highlights EAF (%) Transmission System Minute (mins) 04 05 88.1 88.5 89.9 83.4 87.4 1.5 0.2 0.4 0.3 0.1 FY'16 FY'17 FY'18 FY'19 FY'20 FY'16 FY'17 FY'18 FY'19 FY'20 Distribution SAIDI (mins) 49.7 50.2 48.2 48.1 45.0 FY'16 FY'17 FY'18 FY'19 FY'20 39 39
Slide 40: 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 41: 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,
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