fulfilling vision - Tenaga Nasional Berhad

62
letter to
SHAREHOLDERS (cont’d.)
Tenaga Nasional Berhad 2005 Annual Report
Industrial 48.03%
- 37,911.3 GWh
Commercial 28.74%
- 22,681.3 GWh
Domestic 18.19%
- 14,361.7 GWh
Mining 0.06%
- 48.3 GWh
sales of electricity
(GWh) (Group)
Public Lighting 1.02%
- 805.1 GWh
Export 2.39%
- 1,884.8 GWh
Others (TNB LPL) 1.57%
- 1,240.9 GWh
SHARE PRICE PERFORMANCE
Our ongoing reforms and improved performance throughout FY 2005 attracted the interest of foreign and
institutional investors. Foreign shareholdings rose to 12.52 per cent in August 2005 from 3.2 per cent in
August 2004.
Investor interest in TNB was further buoyed by the removal of the currency peg on 21 July 2005, since TNB
is regarded as a principal beneficiary of Ringgit strength and a proxy for the broader Malaysian economy.
Although the Malaysian stockmarket was bearish throughout most of 2005, our stock set a new trading
record on 22 July 2005 with a turnover of 40 million shares worth RM450 million, a record volume since
our listing in 1992.
FUTURE STRATEGIES
sales of electricity
(RM' Million) (Group)
Industrial 43.43%
- RM7,959.2 million
Commercial 34.08%
- RM6,246.1 million
Domestic 18.25%
- RM3,344.4 million
Mining 0.04%
- RM6.8 million
Public Lighting 0.69%
- RM126.1 million
Export 1.56%
- RM286.1 million
Others (TNB LPL) 1.95%
- RM357.7 million
number of customers
by classification (group)
Industrial 0.405%
- 26,689
Commercial 15.612%
- 1,027,654
Domestic 83.297%
- 5,482.920
Mining 0.001%
- 28
Public Lighting 0.685%
- 45,083
Going forward, TNB will maintain its focus on prudent financial management, value creation and
diversification of income streams to deliver excellence to all our customers and stakeholders.
Budgets lie at the heart of prudent financial management. TNB, like the country, operates on a budget which
seeks to balance our spending with our income. However, this is easier said than done because each year,
we spend billions to upgrade infrastructure and services for the benefit of our customers. This expenditure
on items like new plants, networks, systems and equipment is essential to ensure that TNB can provide
reliable power and reduce outages so business and life can go on as usual. For next year alone, we have
budgeted about RM4 billion for capital expenditure alone even though annual revenue falls short of
RM2 billion.
How can we bring our spending in line with revenue to cover the shortfall? One way is to reduce operating
costs. But this is difficult. We are already on target at achieving annual cost savings of over RM800 million
and have little room left to cut. This, given that we have not much control over fuel prices and the power
prices charged by the independent power plants (IPPs) which make up 40.5 per cent of our operating costs.