Tenaga Nasional (5347) Q1 2024 earnings summary

Executive summary

• Revenue increased by 9.9% year-over-year in Q1 2024, driven by commercial and domestic segments, with industrial also contributing positively.

• Profit after tax declined 27.2% year-over-year to RM677.9 million, mainly due to foreign exchange translation loss and higher tax expenses.

• Significant government initiatives announced: LSS5 (2,000 MW solar), ENEGEM for cross-border energy sales, and expanded Green Electricity Tariff (GET) quota.

• Progressing on energy transition with 10.5 GW of RE capacity secured (4.3 GW operational, 6.2 GW in development), and major projects like Nenggiri Hydro and UK solar underway.

• Data center demand is a key growth driver, with 150 MW utilized in Q1 and major agreements signed with Microsoft and Vantage Data Centers.

Financial highlights

• Q1 2024 revenue reached RM13,640.4 million, up 9.9% year-over-year, with strong contributions from commercial and domestic customers.

• Profit after tax was RM677.9 million, down from RM930.9 million in Q1 2023.

• S&P credit rating upgraded from BBB+ to A- based on improved working capital and collections.

• Working capital improved with MYR 4.7 billion ICPT collected and a 113% collection rate in Q1.

• UK investments began contributing positively to the bottom line.

Outlook and guidance

• Projected electricity demand growth of 2.5%-3% for 2024, with expectations for continued strong performance.

• Stable performance expected for 2024, supported by projected Malaysian GDP growth of 4–5%.

• Planned CapEx for 2024 is MYR 13.8 billion, with 50%-60% allocated to regulated business and the rest to generation, solar, and EV initiatives.

• RP4 regulatory proposal submitted, targeting balanced outcomes in energy security, affordability, and sustainability.

• Aiming to improve MSCI ESG rating from BBB to A in 2024.