Tenaga Nasional Berhad

We will start our session now. Good morning, everyone. Thank you for joining our fourth quarter FY2025 Analyst Briefing. A very warm welcome to our President and Chief Executive Officer of Tanaga National Berhad, our Chief Financial Officer, Mr. Bardo Hicham Fauzi. I also extend a very warm welcome to each and every one of you joining us here today in this hall. We also have 27 attendees joining us virtually while we're back. Today's session will be covered in two parts. Firstly, our CEO, Datuk Magad, will provide an overview of PMB's group strategy and outlook. Followed by, secondly, our CFO, Mr. Bhatrud, will present PMB's fourth quarter FY2025 performance. We will then open for Q&A before we end the session at 12pm. With that, I'm pleased to invite Dato' Insenior Magad Jalaluddin Magad Hassan to kick off our session for today. Thank you.

Thank you, Edwin. Assalamualaikum and very good morning to everyone. Once again, thank you for joining us today in this Endless Briefing for the Financial Results 2025 for Tenaga National. For the Muslim analysts, I would like to say Selamat berpuasa and hopefully this Ramadan will be better compared to the previous Ramadan. So coming back to the performance of Tenaga National, I'm pleased to share some of the key highlights for the financial year 2025. Despite a year of both challenges and opportunities, TMB delivered resilient performance in 2025, recording a core profit adjusted for forex taxation and MFRS 16 of equivalent to RM4.8 billion compared to RM4.2 billion in financial year 2024, reflecting the underlying strength of our core business and the effectiveness of our ongoing initiative to drive efficiency and sustainable growth this positive business growth has allowed us to continue to reward our shoulders at the end of our dividend policy dividend payout of 65.6 percent Equivalent to a total dividend of 53 cents per share for the year 2025. The stronger financial year 2025 performance was driven by improved performance across all our four business pillars. The first pillar is under generation as part of our strategy to deliver clean generation. Genco performance improved to the expectations based on the turnaround program that we conducted over the last two years. with a higher core PIT of RM315 million. This was supported by a stronger operational efficiency as reflected by an improved equivalent availability factor of 87.8% comparatively close to the max that we want to target. Second, under developing energy network, We deploy 12 billion in regulated CAPEX, comprises of 10.3 billion in base CAPEX, and we have started to use the portion of the contingency CAPEX of 1.7 billion. This anticipated investment has strengthened grid resilience, supporting the demand growth for the country, and facilitated renewable energy integration under RP4. Third, under dynamic energy solution, looking at the customer space, for the year 2025, there are now 5,719 EV charge points in the ecosystem, contributing to $7.1 million in revenue. During the year, at the same time, Tenaga National, through Electron Brands, installed 190 new TMB charge points, bringing the total cumulative for TMB Electron of 256 TMB charge points in our EV network. This is to reinforce our commitment and our belief to support the country growing EV infrastructure. This is also being seen by the increase of the registration of the EV cars in the market and it is driven primarily by Proton. As for data centers, we have 35 projects in the system. with a total maximum demand of 4.5 gigawatt the agreed eac of 4.5 gigawatt contributing to 148 percent growth year on year in addition we recorded the highest customer satisfaction index in tmb history we score with a score of 90 or 9 over 10. this was largely driven by the improved residential sentiment following the new tariff structure that is being introduced by the government and also the operational efficiency with fewer repetitive complaints and outage related calls so this is one area that we are happy most because on top of the business performance we are also getting the good feedback from our customers with respect to our services Lastly, under driving regulatory evolution, the IBR framework remains upheld, providing earning stability and regulatory clarity. Importantly, we have secured revenue recognition for quotidian CapEx, similar as base CapEx, allowing us to recognize revenue in the same year that expenditure is incurred. effective from 2025. So this is part of the agreement that we have with the NZ Commission and how the recognition of the contingent CAPEX should be done. So this reduces regulatory lags and enhances our funding visibility. The strengthened AFA mechanism, which was introduced recently, enables more immediate cost recovery from six months to one month, improving the cash flow of tenaga and the working capital efficiency. Throughout the period, you also see that most of the alpha mechanism is actually on the negative, which is a reflection of the tariff structure that we currently have. Together, this announcement will reinforce the resilience of our regulated business and support sustainable shareholder return. Following our resilient financial performance, strong governance and ESG discipline remain fundamentals, enables of sustainable value creation. In other words, apart from business performance, we look at how Tenaga National as company address our sustainability agenda. In financial year 2025, TMB was recognized at the National Corporate Governance and Sustainability Award 2025. where we received the overall excellent award, placing us, TMB, among the top 10 companies, as well as the industry excellent award in the utilities category. This recognition reflects the strength of our governance framework and our continued commitment to transparency, accountability, and responsible leadership. From a broader reputational perspective, our corporate reputation index improved to 88% compared to 80% previously, indicating a strengthening of stakeholder confidence to tenaga nasional. As disclosed in the last quarter, brand finance ranked TMB as the second strongest utility brand globally with a AAA brand strength rating, underscoring the resilience of our brand and the credibility of our long-term strategy, especially in this energy transition environment. In addition, we were honoured at the H Billion Ringgit Club Awards 2025, receiving recognition for delivering the highest return to shareholders over the three-year period in the super cap category. This reinforced our disciplined capital management and our focus on sustainable shareholder value. Beyond this recognition, we have also recorded notable improvement in our ESG performance. We improved our FTSE for good score from 3 star to 4 star and 4 star is actually the highest ranking in the FTSE for good which is recognized by BUSA Malaysia. Our FTSE Russell rating improved to 4 from 3.5 previously. Our sustainability risk score improved to 26.3, transitioning from high risk to medium risk, and we also maintained our MSCI rating of A and our CDP rating of C. This improvement reflects the consistency of our governance practices, disciplined execution of our energy transition, and a strengthened risk management framework. moving on to our key achievement across the three strategic pillars in 2025 i would like to share that under deliver clean generation we made a solid progress across gas solar and battery storage for gas under rfp category 2 new generation capacity we ordered with 1400 for the new Parker Combined Cycle Gas Turbine Power Plant with a target COD by December 2028. This represents a significant milestone for tenaga to strengthen the Malaysia medium-term security of supply and reflect the competitiveness of the generation electricity price that TMB as the leading energy company can offer to the Malaysian market. As previously announced in Q3, we also secured extension Under Category 1, totaling 1,262 MW across three gas power sections, reinforcing system reliability for the country. So we are very positive with respect to the pipeline growth of generation sector while we address the supply and demand for the country. Under battery storage, The battery energy storage system at Lahat Datu Sabah, in which Tenaga Nasional has a stake in it, was successfully achieved COD in August 2025, strengthening the grid stability and supporting the renewal integration for the Sabah grid. Moving on to the land-based solar. First, the Laske Solar 5 project LLS Sabah project. comment construction in november 2025 and as far as the plant cod it is very much on time under the corporate green power program cgpp all three sites that are under construction are progressing well at about 95 percent completion and remain on track to achieve cod in this first quarter 2026 and finally for the centralized solar park we have signed principal terms of bilateral energy supply agreement with one of the leading data center in the country day one data center A strong indicator of growing green energy demand, both from corporate customers. And this is also enabling the crash system for the tenaga. And lastly, under hydro, the Nenggiri hydro project reached 88% completion, including the installation of 400 ton overhead crane, the largest capacity electric overhead travelling crane. The Sungai Perak Hydro Life Extension Programme has achieved 28% overall progress, with major refurbishment work completed. Perkenyi Hybrid Hydro Floating Solar Project, we have reached 70%. of pre-development completion and successfully concluded the epcc tender evolution so once again we are also seeing that the as far as the dramatic generation on the re fund everything going as planned while we continue to strengthen our domestic portfolio We continue to advance our international energy pipeline and expand our global footprint, particularly in the United Kingdom and Australia. I'm glad to inform that in the United Kingdom, our 102 MW solar greenfield development projects at Eastfield, equivalent to 35 MW peak, and Bunkers Hill, equivalent to 67 MW peak, successfully achieved COD in July 2025 and has started the generation of income for Vantage Solar in the UK. This marks an important milestone as this asset begins contributing to the current international earning base that we already have. In Australia, momentum remains encouraging There are three main projects that we are looking at. The first one is at Dinawan Energy Hub, 1.3 gigawatt development at the border of New South Wales. We were awarded approximately 1 gig access right, while 357 megawatt Dinawan Wind Farm. Stage 1 successfully secured the Australian Government Capacity Development Scheme in October 2025, providing revenue, visibility, and mark the start of the project over there in East Australia. The Walter Creek Solar Project, equivalent to 710 MW development, We have executed connection process agreement with Transgrid, meaning that we are executing the process to be connected to the grid and successfully submitted capacity investment scheme bid to secure the revenue support, meaning that both technical and the commercial front are very much within the progress. Meanwhile, the third site that we are working on, at the Mali Wind Farm, 400 MW, we have completed ecology surveys for the alternative connection route and secured the necessary land easement for the interconnection line. This step supports the alternative grid connection strategy outside the RAE zone. Bear in mind that, based on our experience, The connectivity for the RE to the grid for this so-called Australian market, it may take some time. But once it is very much connected, then the revenue is also quite consistent and secure. So overall, our international portfolio continues to progress steadily. Impressing our long-term growth pipeline beyond our Malaysian shore. Next, we move to investment into the grid. Under our second strategic pillar, develop energy transition network. We delivered year one RP4 with a disciplined and efficient regulated CAPEX deployment. Total regulated CAPEX utilization reached 2F billions against the original budget of a budget plan of $7.8 billion, exceeding 100% of our 2025 target budget. This investment was strategically allocated across three priorities. So we invest $5.4 billion to maintain security of supply, $5.3 billion to support demand growth, and $1.3 billion for the category of energy transition project. Achievement for the key projects. First, we significantly outperform our smart meter target, installing over 1 million units in 2025 alone, bringing the total installation to about 5.6 million units. million unit now covering more than half of our customer base as for distribution automation initiative we expanded deployment to over 500 one 5100 succession during the year bringing the total to over 38 succession in the system we will have also fully completed 500 kv overhead line Ait Tawa to Bentong South and Lengging project with a total of 854 transmission towers and around 325 kilometers transmission length reinforcing the backbone of the 500 kV national grid system. Meanwhile, our 100 MW, 400 MWh battery energy storage system pilot project at Santung is progressing well reaching 85 percent completion the next dimension of our strategy is regional integration recently we signed the tripited energy willing agreement phase two under the last thailand malaysia singapore Power Integration Project or known as ITMS PIP version 2.0. This mark another important milestone in advancing ASEAN power grid and strengthening cross-border energy cooperation. Under this arrangement, Malaysia plays two key roles. First, TMB supply RE energy up to 100 MW from Laos to Singapore, with the single buyer determining and collecting the energy charges. Second, TMB acts as the wheeler, transmitting the energy through Peninsular Malaysia to Singapore. For 2025, the total energy export under this arrangement amounted to approximately 10.5 GWh, reinforcing Malaysia's evolving role as the regional energy hub. Completing this, complementing this, we have also operationalized Energy Action Malaysia, Energem, with a total energy export of 500.8 gigawatt to Singapore in 2025. This represents a significant national achievement in strengthening Malaysia's position as RE leader in Southeast Asia through a transparent and competitive bidding commercial mechanism. Beyond commercial values, this regional interconnection enhances grid flexibility, supports cross-border integration, and strengthens long-term energy security across the region. We will continue working closely with our regional partners to deepen cooperation and expand business opportunity under the ASEAN Power Grid Framework. Moving to our third strategic pillar, dynamic energy solution. Electricity demands continue to grow resiliently in 2025. Total unit sold reached 133,895 GWh, reflecting a sustained demand momentum. This growth largely underpinned by commercial sector, which accounts 38% of the total unit sold. Commercial demand grew 10% year-on-year, led primarily by data centers, which contribute 7.1%, followed by a subset of malls, business and accommodation services at 2.4%, and other retailer sectors contributing 2.5%. In terms of sales contributions, malls, business and accommodation services made up 80% of the total units sold, other sub-sectors contributing about 16%, while data centers account for 4% of the total sales in financial year 2025. Evans said that importantly, data center continue to anchor structural demand growth. As for 2025, we have 35 projects in the system, with a total maximum demand of around 4.5 GW and cumulative maximum demand in the pipeline of about 7.5 GW, underscoring Malaysia's growing position as a digital investment hub. From a load utilization perspective, we reached 150 MW in December 2025. reflecting the steady ramp-up of operational facilities for data centers. Overall, demand fundamentals remain strong, supported by structural, commercial growth, and electrification trends. Alongside the robust demand growth, we also see positive momentum across our customer-focused energy transition initiative, mainly under the EV ecosystem. We continue to expand our charging network with 256 cumulative charge points installed, including adding 190 in the year 2035 alone. Under the Green Lane Supply Connection Initiative for EV, charge point operator. Progress remains encouraging. To date, we have commissioned approximately 32 MW of supply connection and in 2025 alone, completed 110 projects representing around 14 MW of maximum demand. This demonstrates our ability to facilitate expedited connection, particularly for high growth sector. From a financial perspective, our EV charging ecosystem generates about, as mentioned, 7.1 million in revenue, representing an approximately 88% year-on-year increase, in which around 2.7 million come from TNB-owned charge points, reflecting steady adoption and increasing utilization of our infrastructure. Moving to Solar Rooftop through JISPAC, Since inception in 2019, we have secured 3,125 projects, representing 536 MW peak of secured capacity. As of December 2025, we have installed 260 MW peak, generating approximately $100 million in revenue for 2025. We continue to see strong participation from key customer segments such as government data centers and construction for the solar rooftop. On energy efficiency, my TMB apps is now adapted by more than 8 million customers representing approximately 75% of our customer base. Of these, more than 2.6 billion users have subscribed to MyTNG Energy Budget feature, collectively helping to save 106 GWh of energy and avoid 74,000 equivalent tonnes of carbon emission as of December 2025. Under the Time of Use Scheme or TOE Scheme that recently introduced, adoption continues to show encouraging progress. As of December 2025, approximately 102,000 customers are actively benefiting from the scheme by optimizing their electricity usage during off-peak periods. This is further supported by the streamlined application process via MyTMB app, which is now available, enabling seamless participation and a greater customer accessibility. Overall, this initiative supports cross-intervention for the customers. while enhancing load management and overall system efficiency. We believe that the TOE scheme will be a hit among our customers in time to come. With that, I will now pass to our CFO, Mr. Badrul, to provide a detailed overview of our financial year 2025 financial performance. Please, Badrul.

Thank you, Dato'. and good morning everyone so good to see so many of you this morning and we have now close to 60 people online as well so i hope you're happy with the numbers that you have seen so far all right so let me start by saying that um our performance this year we are showing stronger financial performance but most importantly this is actually driven by regulated business as well as effective capital management So if you look at across the three financial metrics, revenue, EBITDA and PAT, all three across the line are showing positive year-on-year growth. And for revenue, specifically for 2025, actually increased by 19.4% compared to previous year, mainly driven by higher electricity sales. So, implementation of cost reflective RP4 approved tariff actually is supporting our revenue and demonstrating continued stability of our regulated business. But most importantly, if you look at EBITDA, EBITDA has improved, supported, of course, by the higher revenue. But EBITDA increased around 2.8% year-on-year to $20.5 billion already this year. And most importantly, EBITDA margin actually strengthened a little bit to 31.6%. Obviously, this is showing improved efficiency as well as operational improvement that we are pursuing across the company. So to us, this is important because it shows that all our effort to improve efficiency are continuing to progress. This is, of course, paired together with cost management as well as strong operational improvement as well. So this brings us to the profit line where the profit grew mainly because of stable operational performance as well as all this cost improvement initiative that we have actually put into the company. So our core profit adjusting for Forex Translation and MFRS-16 stood at $4.769 billion. So that is a 14.7% increase year-on-year compared to $4.157 billion in the same period last year. So based on that, I think it's quite clear that if you look at our overall performance, operational performance is being supported as well by lower net finance costs, as well as forex movement, which has actually provided additional uplift to our numbers. However, most importantly, cooperation remains the main driver of our performance for 2025. So with that, the numbers for 2025 obviously is on track for us to continue growing, supported by resilient operations and prudent financial management to make sure that we continue to deliver this sustainable performance not just for 2025, but for the many years going ahead for the next many years. so next one i think you would be able to see that our group earnings is supported by two important factors the first one is improved generation performance as well as of course our world-class network performance so if you dive in into more detail the group earnings are contributed by solid technical performance which is now supported by much improved plant performance and world-class network performance across of course our transmission and distribution system So as far as generation is concerned, the EEF at 87.8% in 2025 is a marked improvement compared to 83% that we recorded same period last year. So again, this improvement really reflects the overall plant performance improvement because of the turnaround initiative that we have put in place and starting to bear fruit now. So this is something that is very close to our heart. Definitely, we remain committed to maintain this high availability, as well as operational excellence to make sure continued financial performance across Genco. In our transmission, our system minutes for 2025 is at 0.15 minutes, which is well below even our own internal threshold of actually 1.5 minutes. This again underscores our continued performance to make sure that we have a highly reliable as well as stable transmission network. So on the distribution side, PsyD for 2025 improved to 46.93 minutes against well below our internal threshold of 48 minutes. So this is important because the strength of our class network continue to safeguard the earnings of our regulated business, but most importantly as well, ensuring better services for our consumers. That's how we have been able to achieve just now customer satisfaction score of 9 out of 10. So it is now being demonstrated not just on the network side, but also being felt by our customers as well. So if we move along on the capital management side, you will be able to see that stronger collection has actually reduced receivables of our book. And we have also demonstrated in 2025 that we have optimized capital deployment to make sure that we have a healthier cash flow position. So if you look at our trade receivable, it started the year at 4.4 billion and we ended the year actually at 3.9 billion. So for those who have been tracking us for a long time, you have not seen a figure below 4 billion for quite a while. So this is something that we are very proud of. And the fact that we have also improved the collection period beginning of the year at around 25, we are now ending the year with 23 days as of December. So, when we drill down further into what we have actually achieved, of course, there are reasonable explanations for this. This is the outcome of what we are putting in place, and collection in particular has been identified actually the outcomes of three main initiatives that we are putting in place. The first one is the fact that we have now established a dedicated task force for our high voltage and medium voltage customers with dedicated personalized account manager to actually make sure that they are taken care of for all their needs. But of course, most importantly, they must also pay their bills, right? So that's why as part of the overall process, they now become a lot more personalized customer. So this is our value add to our customers. Second one, over the years, we have also, and this year, intensified our push to promote our customer to move into payment channel of direct debit. So this will make sure that obviously on time, the payment are made. So that's helped push the collection into much better territories. And lastly, item number three to all of us here, Datuk mentioned just now, we have 8 million customers on MyTMB app. We need to check all your phones, make sure you are on it. And if you are on it, you will notice actually this year we have introduced a new function because we have now pre-due notice of payment. So what we're saying before this, all of you, we know you want to pay on time, but sometimes life gets in the way, you get delayed, you forget about it, that's why you're not paying. So now we're helping you in one more step. We make you preview notice so that you know that we can match you to pay on time. So that actually has helped us to make sure that the collection across not just the major customers, but all our accounts become more timely. So most importantly, yes, that's on the receivable and collection side. But if you look at our capital allocation side as well, 2025, we have demonstrated very strong operating cash flow. And this is, of course, the outcome as well from our more optimized capital deployment model. So during the year, Datuk Magat mentioned just now, we have deployed close to 15 billion in CAPEX. And this is reflecting our continued investment in regulated network expansion, renewable capacity growth, as well as system resilience. So this is important because for us, the ability to scale up investment was undertaken while still maintaining a balanced and robust balance sheet position. So at the same time, you will notice that we are actively optimising our cost of borrowing, where net cost of borrowing actually improved to 4.63% as opposed to 4.83% in 2024. So this reflects a proactive liability management, improved our credit positioning and favourable funding outcomes being supported by all the banks working with us. So it is important for us to reiterate the point that yes, capital allocation is very important to us and we are making sure that it's balanced to support our growth of investment while preserving our financial flexibility and maintaining balance sheet strength. So if we move along to more detail of RP4 CAPEX, you will notice that we continue to deliver robust regulated CAPEX spending. And during the year, most importantly as well, we have actually finalized contingent CAPEX recognition, which is a key factor that we have been working towards at the end of the year. So just to take a step back, and if you look at our total capex under IP4 for 2025 to 2027, total was supposed to be $42.82 billion, out of which $26.55 would be base capex, and the balance of $16.27 being contingent capex. Where we stand today, based on the progress of the project and what we know, we believe that we expect to utilize approximately 80% to 85% of the contingent CAPEX under the current regulatory period. Of course, subject to project approval as well as demand requirements. You will notice that over the last few quarters, that number was 70%. So now, as become clearer to us, we believe that will be around 80% to 85%. And some of the projects, of course, we are exploring as well to expedite or push for other projects to be included inside there. So for FY2025, we actually achieved regulated CAPEX utilization of, as mentioned by Dr. Magat, just now 12 billion, out of which 10.3 are base CAPEX and 1.7 contingent CAPEX. So this represents around 30% utilization of total RP4 allowed in year one. And this is important for us because this shows that we have been able to execute this project and scale up our investment. So if you recall, in 2024, the final year of RP3, we delivered CAPEX of $8.8 billion. Yes, it's massive. But scaling up from $8.8 to $12 billion over one year, so that's something that we have demonstrated. So I think this is the part where we want to assure you that as far as the RP4 numbers are concerned, these are real and we are able to operationally execute these investments. So that's why if you look at our capex going ahead, we expect that for 2026, that number will be around $13 billion. And that would grow to further to around $15 billion by 2027. So if you do the math, 12 in 2025, 13 this year, 15 next year, that will be around $40 billion. That's because the guidance on the contingent cap tax that we put there, that's around 80% to 85%. But of course, we're not resting on our laurels. I have put there as well, those dotted bars to show that there are potentially uplift to that number. If we are able to push for a little bit more approvals on the contingent capex, and hopefully riding on stronger demand than subject to regulatory approval, we believe that we should be able to optimize that number to the amount that has been approved under RP4. so i just want to conclude this the fact that yes we talk about base and contingent capex and before this we have not been able to recognize the revenue from contingent capex but now it's very clear in our financial statement you have seen that that whatever continued capex that we spent this year that is already being recognized in our financial statement in the same year. So it's being treated the same as base CAPEX as far as recognition is concerned. So this hopefully has reduced one of your key overhang regulatory concerns, but most importantly, this will enable you to have a clear visibility of our earnings going forward. So for us, regulated CAPEX development, we are making sure that those are, of course, in line with the approved allowance. But most importantly, this will support the security of supply and as well as support the demand growth and energy transition initiatives. And before I pass back to Dato' Magad, we have this final slide. Hopefully, you have seen the numbers. So for us, this is a reflection of our ability to continue stable dividend payout and most importantly, reflect our commitment to rewarding our shareholders. Some of the major shareholder straps are here. Hopefully, you're happy with that. But at the same time, we continue to maintain prudent capital management. So if you look at the philosophy behind our payment this year, you have seen, yes, I've been talking about good performance in 2025. So for us, this is a reflection that we perform better in 2025. So we continue to reward our shareholders better as well. So as far as dividend is concerned, we already paid 25% interim beginning of the year. And now we are declaring 28 final dividend, bringing the total to 53 cents. And if you compare that against the last year's payment of 51 cents, and it's also reflecting the trend of our payment, growing the dividend from 40 cents in 2021 to where it is today, 53 cents. So total dividend payout this year amount to $3.1 billion. And we are pleased to commit that, yes, you are seeing our dividend policy here, 30% to 60%, which we, of course, will continue honoring. But I think most importantly as well, you should be less assured that we will try our best to make sure that we sustain the current trend of dividend payment going forward, including for this year. So with that, I'll pass the mic back to Dato' Magad. Thank you, Dato'.