Tenaga Nasional Berhad

Taklimat Keselamatan Dewan Silara National Energy Centre. Welcome to University Tenaga National. You are now in Dewan Silara National Energy Centre NEC Unit 10. Please follow these instructions in the event of an emergency. Please remain calm and stand by for further instructions to evacuate. In the event of an emergency, the alarm will be activated and ring continuously. Please make sure Make your way calmly to the closest emergency exit. Please exit the building immediately and in an orderly manner. Please proceed to the designated assembly area. Please remain at the assembly area until you receive further instructions. Please seek assistance from personnel on duty in cases of other emergencies. your your cooperation is highly appreciated may the ceremony run smoothly and successfully thank you Good morning, everyone. Thank you for joining our third quarter FY2025 Analyst Briefing. A very warm welcome to Yang Berbahagia, Datuk Insenior Megat Jalaluddin bin Megat Hassan, President and Chief Executive Officer of Tenaga Nasional Berhad, and Chief Financial Officer, Mr. Bardul Hisham Fauzi. I also extend a very warm welcome to each and every one of you joining us today in this hall. We also have 70 attendees joining virtually via Webex. Today's session will be covered in two parts. Our President and CEO, Dato' Magad, will first provide an overview of TNB's group strategy and outlook, followed by our Chief Financial Officer, Mr. Badra, will share TNB's third quarter FY2035 performance. We will then open for Q&A before we end the session at 11am. With that, I am pleased to invite Dato' Insenior Megat Jalaluddin bin Megat Hassan to kick off our session. Thank you.

Assalamualaikum warahmatullahi wabarakatuh and a very good morning. First and foremost, thank you very much for being here to be in the session where we share our third quarter performance and i would like to welcome everyone to this new i would say development by tenaga national which is the national energy center which is part of our unit and purpose in which we would like to support the government agenda with respect to the energy transitions. So this is where we hope that we can position tenaga further with respect to the energy transition for the country as well as for the region. So I'm pleased to share some of our performance highlights for the first nine months of financial year 2025. The group delivered a strong financial performance, underpinned by the continuous stability of our regulated business. We recorded a core profit adjusted for forex transaction and MFRS 16 of RM3.26 billion compared to RM2.7 billion in the corresponding nine months last year. So this is a reflection of our underlying strength of our core business. So what we have seen to date is stronger performance across all the four business pillars that we have. It's driven by all the improvements across those four business pillars. The first under the deliver clean generation. Genco overall performance improved with higher co-operative of RM238.9 million compared to RM1758 million in the previous year. This is supported by a strong operational efficiencies as reflected by an improved equivalent availability factor or known as EAF of 86.9%, and as everybody can remember, Manjung 4 is fully operational since the beginning of the year. Second, under the Developing Energy Transition Network Fund, we deploy RM8.3 billion of regulated CAPEX, comprises of 7.6%. billion in base capex and additional 0.7 billion in quotidian capex this intensified investment demonstrate steady progress in delivering our rp4 commitment especially in great investment to ensure reliability of supply and to deliver those projects that related to the demand growth for the country So under dynamic energy solution, happy to share that we are making good progress with respect to the electrification of transport in the EV space, where we see to date we have more than 5,000 EV charge points in the ecosystem, contributing to about 5 million in revenue. Within this ecosystem, Tenaga National, through our Electron branch, installed a new 94 TNB charge point during the quarter, bringing the total to 160 TNB charge point in our EV network. This is to reinforcing our commitment to support the country's growing EV infrastructure. So this is where we see a good momentum and progress with respect to the electrification of transport, especially to the mass transport, in this case, the cars instead of the heavy vehicles. And lastly, under our driving regulatory version, The transition from the ICPT to AFA mechanism effective 1st July 2025 marks a significant structural improvement. The AFA mechanism enables immediate cost recovery compared to the previous segment likes in the previous ICPT regime. This helps improve TMB cash flow at least by 2%, and definitely enhance our planning with respect to the working capital. So overall, this results reflect our resilience, operational discipline, and continued progress in advancing the energy transition while delivering sustainable value to all the stakeholders. Moving on to our generation gross outlook, momentum remains strong, supported by government national capacity plan. Recently, we received a letter of notification for technical and commercial term, covering a total capacity expansion of 1,262 MW across three power stations that are owned by Tenaga National, namely Glogor, Putrajaya and Tengku Jaffa. This, if everybody can recall, is part of the so-called RFP that's been put forward by the government under Category 1, where the government requests for proposal with respect to the extension of power plant. We are glad that we have gotten the results and this extension strengthen system liability and ensure that we remain well positioned to support the Malaysian growing demand as well as to ensure that the capacity and the revenue that is coming from this power station will continue be part of TMD revenue in the future. On the second category, the new generation capacity request for proposal, we are awaiting the regulatory decision which focuses on the new generation capacity. And TMB, of course, participates in the RIP. And we hope that we can get the outcome of the results before the end of the year. So in short, this national capacity plans, both extension as well as the new generation capacity, provide a strong visibility and reinforce a favorable outlook for TMB generation growth in the pipeline for the future. At the same time, let me update some of the progress that we are making with respect to the project that we are undertaking at the moment. On the domestic front, the project execution across our clean generation portfolio continues to progress well and firmly on track. The first one is the Negeri hydro project. We have now reached 53% completion. and we remain on track to meet the COD target by the second quarter of 2027. Happy to share that major civil works, including roller-compacted concrete, RCC, placement for the settle dam, are already underway. The second project that we are currently undertaking is the Sungai Perak Hydro Life Acceleration Program has achieved 23% overall progress. Data collection for all the units has been completed and this is a rehab project and the project is on track to deliver the first unit at Cendro Power Station by the first quarter 2026. At Kenya, the plan for the hybrid hydro 14 solar project has 70% redevelopment progress and the commercial evolution is currently in the final stage. So this is another opportunity for Tenaga to provide clean generation to the customers directly through the CREST program. On the land solar projects that we are undertaking, under the Corporate Green Power Program or known as CGPP, all three sides continue to progress well with more than 85% completion and remain on track to achieve COD. The second project for the land solar is the awarded last case solar 5 tender. It's progressing towards achieving financial close by early 2026. At the same time, We are also taking a project into Sabah together with SASB, which is our majority-owned subsidiary. And we also expect to have a departure close by the end of this year, 2025. And lastly, the Petri Energy Storage System at Lahadatu, Sabah, in which our subsidiary TRE are taking together with SSB has successfully achieved COD in August 2025 and it is in full operation just now and it is it did help the so-called provide the energy to the eastern part of Sabah. Overall, we have 1.2 GHz currently under construction, reinforcing our clean generation growth platform that we currently have. On the international front, the third quarter update progress in the United Kingdom. We have achieved our international RE portfolio, recorded important milestones this quarter. In the United Kingdom, our greenfield solar project Both Eastfield 35 MW peak and Bunkers Hill about 67 MW peak have achieved COD in July 2025 contributing a combined of 102 MW peak of new solar capacity to our portfolio and has started generating revenue for us. Over in Australia, momentum is equally encouraging. As part of the 1GW Dinawan Energy Hub, the 357MW Dinawan Wind Farm Stage 1 has successfully secured support under the Capacity Investment Scheme in Australia. This provides long-term revenue assurance for the project and enhances overall cash stability for the future. The second project that we are undertaking in Australia, it is named Water Creek Solar Project, totaling 265 MW of solar capacity and 300 MW of battery storage. We have executed the connection process agreement with the Transgrid, which is the transmission operator in Australia. This allows us to move forward with detailed group impact studies of the connection and the best possible discussion with respect to COD. In parallel, procurement for the standalone base is also ongoing. Meanwhile, for the Mali Wind Farm project, 400 megawatt Mali Wind Farm, We are progressing connection planning outside the designated RE zone and have secured the required land instrument for the transmission connection, a key enabler for the next development phase. As you can see that the Australian project, with respect to the regulatory requirement, one of the key elements is actually to get access to the connectivity to the grid. So many of our projects are now at that so-called pre-development stage, securing the grid access, and we believe that we are making a good progress with respect to those in conjunction with cooperation with the local transmission operator. So with this addition, our group secured RE energy capacity now stands at 13.4 gigawatt, of which 4.6 gigawatt is already in operation, while 1.2 gigawatt is under construction, as I summarized the above, and 3.6 in the pipeline stage. This continued goes to reinforce TME position as a meaningful regional RE player, while providing diversified income stream over the long term. Next, we move to investment into the grid. And our second strategic pillar, develop energy transition network, We are on track to deliver our regulatory targets, having successfully utilized 8.3 billion of regulated transmission and distribution capacity. So we invest 3.8 billion to maintain security supply, 3.8 billion to support demand growth, and 0.7 billion capacity for energy transition projects. enhancing the grid readiness for higher RE penetration and a greater digitalization embedded to make it a smart grid. Progress of key project. Firstly, the product demand groups, especially data center connection. We have invested around $1 billion while we are also developing the 300 kV overhead Length between Aya Tawa and Langin Project at approximately 0.3 billion to strengthen the backbone of the national grid. Our 100 MW, 400 MWh battery energy storage system pilot project at Santung continues to progress well, reaching 56% of overall coefficient. So we remain on track to achieve the targeted completion by December 2026. Meanwhile, at the distribution space for smart meter, we have already delivered our financial year 2025 full year 360,000 unit target. with around more than 500,000 units installed at the end of the third quarter 2025, bringing the total 5.1 million units into the system, which is about 45% of our customers. This is also reflecting our strong momentum in empowering the customer energy management, including the new tariff offering of TOU. So this is one of the I would say the intended outcome of the smart meter providing the customer with the energy management system and supported by the terrestrial structure of TOU. For the suction asymmetry, which is important for our supply reliability, we have installed the air system in 2,590 subsessions at the end of third quarter 2025. And as of October 2025, we have achieved 75% of our 2025 target of 4,026 subsessions. So the projects under the CAPEX both for transmission and distribution are well on track. While our domestic investment ensures the grid is ready for rising demand as well as the RE penetration, the net emission of our strategy is original integration. Under the ASEAN power grid, we are actively developing integrations that will position Malaysia as a key hub for clean electricity exchange across the region. Currently, we have about 1.4 GW of existing interconnection capacity with Singapore and Thailand. Looking ahead, we have five potential pipelines interconnection projects, enabling the transmission of over 6 GW of combined RE energy, including hydro, solar, as well as wind with Vietnam, Singapore, Thailand, Sarawak, and Indonesia. This project will serve as enablers for the regional energy transition and position Malaysia as a central hub for cleaner energy flows. On the business plan, we believe this is the foray of tenaga to have part of the so-called regional market in our revenue and hopefully we can expand the third pillar in combination of the domestic and international business. Now we have the opportunity to include the regional business as part of the mainstream of tenaga revenue. Moving to our third strategic pillar, dynamic energy solution, we see that electricity demand has continued to grow. For the third quarter 2025, the total unit sold reached more than 99,000 gigawatt hour, reflecting sustained demand momentum. This growth was largely underpinned by the Commercial sector, which accounts 70% of the total units sold. For the commercial demand, we see that the growth year-on-year is about 7.7%, led by three sub-sectors. Data centers, of course, contributing 5.2%. followed by the malls, business and accommodation services at 2.2% and the rest of the commercial sector adding another 0.3%. So we see a strong growth with respect to the commercial sector as well as our domestic sector. In terms of the sale contributions, malls, business and accommodation, Services made up 80%, other sub-centres contribute 60%, while data centres account for 30% of the total units sold in 2025. So what does it mean is that, yeah, we can see that data centre is growing, but in the overall scheme of the sub-centre, uh so-called unit now it contribute about three percent we still have the majority of the commercial from the mall and business and commercial services adding up by the education and also the communication communication sector So we are happy that overall we have a good sub-sector growth, not only in data centers, but the other remaining business in the commercial sector. For data center itself, it continues to anchor the structural demand growth. As for the end of the third quarter, we have 29 projects in the system. which a total maximum demand of 3.8 megawatt. Looking ahead, our secure pipeline now stands at 49 projects representing 7.1 gigawatt total maximum demand in this term, underscoring Malaysia's role as the digital investment hub. Alongside this robust demand growth, we are also seeing positive momentum across our customer-focused energy transition initiative. Under the EV ecosystem, we continue to advance our EV charging rollout with 160 cumulative charge points installed, including 94 in the third quarter of 2025. So we remain on track to exceed our TMB-owned targets of 250 charge points installed by the year end of 2025, supporting the government EV roadmap and, of course, expanding the charging facilities nationwide. Year-to-date, our EV charging ecosystem has generated about $5 million in revenue, of which 1.7 million come from our own TMB charge point. This reflects steady adoption of our charging solutions and validates the growing demand for EV infrastructure. For the EV charging development, we have introduced the Green Lane Supply Initiative. And for this initiative, we have completed around 7 megawatt of connections with a target to achieve around 8 megawatt connection within this year. Interests continue to grow strongly. We currently have 448 applications in pre-consultation, representing 130 megawatt of potential new connections as we move forward. Moving on to the solar rooftop through G-Spark, update remains steady. Since inception in 2029, we have secured more than 3,000 projects representing 538 MW peak of C-code capacity. As of September 2025, we have installed a total of almost 200 MW peak. generating approximately $80 million in revenue for the first nine months of this year. We are seeing a strong participation from key customer segments such as manufacturing, government, as well as from the construction sector. On energy efficiency, multi-MVFs currently adopted by 8 million of our customer base, which represents 80% of the current 10 million customers that we are having. Over 2.5 million users have now subscribed to my TMB energy budget feature, helping save 100 gigawatt hour of energy. And at the same time, if we calculate in terms of the carbon emission, we have a broad range more than 75,000 tons of carbon emission as of September 2025. Additionally, as I mentioned, the update for the time of use scheme has been very encouraging, with about 52,000 customers now optimizing their consumption pattern to better manage the electricity costs. This initiative reflects our progress in driving customer participation in the energy transition and unlocking growth from the consumer segment of our customers. So that is the overall four pillars performance as of the third quarter. Now I will pass to our CFO, Mr. Badrul, to provide detailed updates on the third quarter financial performance. Please.

Thank you, Dato', and good morning, everyone. Good to see all of you here in Unit 10 today. And since the results last Friday, it seems like you guys have been doing a lot of work over the weekend. So good to see you here. So I'm pleased to report that for our nine-month performance, you've seen that we have a stronger financial performance, which mainly still driven by regulated business. And obviously, you will see as well a result of more effective capital management. So for the first nine months of 2025, revenue EBITDA and PAT across the board have showed positive year-on-year growth. So as of nine months 2025, our revenue actually increased by 18.3% compared to previous year, and you'll notice that this is mainly driven by higher electricity sales. It's important to note that implementation of cost reflective up before approved tariff continue to support revenue, as well as affirming that it will continue to support the stability of our regulated business. On the EBITDA side, you'll see improvement as well, supported by higher revenue, recording increase of 4.8% year-on-year, increasing to $15.088.2 million. EBITDA margin as well, you'll notice that strengthened to 31.2%, showing improved efficiency across the globe. So I think this is important to note that as we monitor the EBITDA margin, this shows continued progress of the company, where a lot of cost management has been put in place to ensure our stable operation continue to deliver the regulated profit. So at PAT level, you will notice that our profit grew mainly because of the improvement in the operational performance of the company. So you'll notice that we are now focusing on core profit after adjusting for Forex Translation and MFRS16, which is a much better reflection of the performance of the company. So that figures now is at $3.259 billion, which is an increase of 13.7% year-on-year, compared to the same period last year of $2.867.4 billion. So I think based on that number, we would like to conclude that as far as the overall performance is concerned, Lower net finance costs as well as forex movement actually provided an additional uplift to the performance of the company. But most importantly, co-operations remain the main driver of the performance of the company. So for FY 2025, we believe that the group remains on track, supported by resilient operations as well as prudent financial management. This will make sure that we continue a sustainable performance for the full year this year. You will notice as well that as far as the group earnings are concerned, we have actually supported by two important pillars that continue to support our operation. It's importantly improved generation performance as well as sustained world-class network performance. So this is important as you notice that the network reliability across transmission distribution continue to deliver our earnings. So as far as generation is concerned, the higher equivalent availability factor of 86.9% in nine months this year is much higher compared to 80% that we achieved same period last year. So the improvement actually reflects stronger overall plant performance and the fact that our maintenance and repair and all are delivering the expected performance from the plant. So this is something that a lot of focus is being put across and we continue to maintain this high availability as well as operational excellence across our plan for this year and many more years to come. For system minutes for transmission, nine months this year is actually at 0.0695 minutes, which is as reported in and out every quarter, well below our internal threshold of 1.5 minutes. This is important because as you notice, a core part of our revenue and profit come from this and this continue to underscore our commitment to make sure that our regulated business continue to perform and deliver the baseline revenue and profit. This will only make sure that we have a highly reliable and stable earnings as a result of stable transmission network. So for SID distribution minutes, you notice that the numbers for this year improved to 34.99 minutes compared to 35.72 minutes in 9 months 2024. So I think this is again, every quarter we would like to emphasize this because this is an assurance to all of you that stability of our regulated business ensures that we've got better services to our consumers and continue to deliver the earnings of the group. So if we move to a bit more financial matrices that we are collecting, you will notice that we have a stable collection trend and regulatory certainty continue to underpin our very resilient cash flow. So if you look at our trade receivables and collection, trade receivable remains stable. It has been around 4.4 to 4.7 billion year to date and continue to be stable. This actually also a reflection of stable collection trend with average collection period which continue to be below 70 days. So this has been at around 27-28 days. So very healthy numbers despite the jump on the revenue which has grown significantly by 18%. So you will notice as well as far as the AFA mechanism which has gone into effect as of 1st July 2025. This actually enable us to recover immediately all our generation cost because it is based on forward looking forecast every month. So this has also helped us in the sense that coal price has now stabilized at around 90 US dollars per ton this year compared to much higher 121 US dollars per ton as of September last year. So we believe that the fact that fuel prices are stabilizing, we have a strong collection trend, and it is being helped further by the newly implemented AFA mechanism, which will only continue to strengthen our working capital, as well as provide us a much healthier cash flow position. So in short, I think this is what you're going to see. We have put a lot more focus in our capital management, which is actually giving us the right result on the pretext of stabilizing fuel prices, strong collection. And this will continue to make sure that we have the liquidity and the strength to make sure that we have the financial resilience for us to continue investing. So this trend that you're seeing today actually will show that we have a strong foundation enabling us to weather the market condition and most importantly enable us to continue our long-term investment plan to make sure that we deliver the energy transition agenda. So if we go into more detail as far as the outcome during the quarter, you will have heard that we've got two reports came out from both S&P and Moody's. So both international rating agencies actually have reaffirmed their ratings of the company with stable outlook. This is something that is very important, like I said, because you have noticed that we have been investing a lot this year and we will continue to invest in 26 and 27 as well. So S&P Global Rating maintain the rating of A- and Moody's continue the rating of A3. But I think most importantly, probably this one, some of us, since most of you are equity analysts, you probably don't dive into the detail as far as the credit rating is concerned. But I think we would like to highlight that for S&P Global Rating, As a matter of fact, yes, we continue to be rated A-, but they have a component where they have a standalone credit rating profile of Tenaga as well. So that rating before this was BBB, so now that has been upgraded to BBB+. So before this, it's standalone BBB, but we've got two NOSH rating upgrade to A- to reflect the sovereign rating. But now, on our own, we have already been upgraded to BBB+. So we are only upgraded one NOSH reflecting the sovereign nature of the country. So this is an affirmation that for as far as S&P global rating is concerned, they believe that our cash flow is going to be a lot more resilient going forward. supported by two things. The first one is the AFA mechanism because this will actually stabilize our cash flow and receivable with immediate recovery of generation costs. And they have been tracking our performance in terms of the least liability, especially the PPAs. And now they are confident that the overall regulation formulation for PPA enable us to recover all the costs under the Power Purchase Agreement with the IPPs. So with those two adjustments to the cash flow forecast of the company, they believe that the cash flow strength of the company will only be better going forward. Moody's rating, they continue to reaffirm the A3 rating. Obviously, the normal assessment covers the fact that we have a very supportive regulatory regime and tariff reform that has been implemented by government that enhances the revenue visibility and cash flow efficiency. So obviously, when we talk about the credit rating, usually we'll take it as a blended, more indicative ratio of gearing ratios. But I think it's important to note that as far as both Moody's and SSP are concerned, they are actually monitoring a different cash flow profile. So just to give you some perspective, S&P in particular, they monitor funds from operation as a level of debt. and moody's they monitor retained cash flow as a percentage of that so yes i know a lot of you guys are monitoring our overall gearing ratio in particular but for credit rating purposes they actually dive in into more detail to make sure that the cash flow are supported by operation cash flow coming forward especially in an environment where you continue to invest So I think what we are putting across today is the fact that we believe that in summary, this recent upgrade and re-information continue to underscore the strength of our credit profile as well as our long-term financial outlook. So we always would like to point that as far as S&P in particular, this reflects increasing confidence in the robustness of our fundamentals as well as the fact that we have a stronger cash flow stability and visibility with minimal risk altogether this development reinforce our financial resilience and validate our disciplined approach to financial planning in managing our balance sheets so that we continue to enable our long-term business plan so i think we are very clear as far as we are concerned yes we are pushing for growth and we will continue to support the nation's energy transition and creating continuous value for our stakeholders With that, I'll pass back to Dato' Megat to cover the outlook for the year, Dato'.