Tnb-Financial Analysis Essay Example

Tnb-Financial Analysis Paper Presentation OF CORPORATION PROFILE3 TENAGA NASIONAL BERHAD FINANCIAL ANALYSIS 1998-2007 i)PROFITABILITY RATIOS AND SALES REVENUE5 ii)LEVERAGE MANAGEMENT 9 iii)EARNINGS PER SHARE11 iv)LIQUIDITY RATIOS12 v) FIXED ASSET TURNOVER15 EXECUTIVE SUMMARY17 REFERENCE18 APPENDIX 1: RAW DATA APPENDIX 2: ANNUAL REPORT 1998-2007 INTRODUCTION OF CORPORATION PROFILE Tenaga Nasional Berhad (TNB) is the biggest service organization in Malaysia. It is additionally the biggest force organization in Southest Asia with RM65 billion worth of advantages serving more than 6,000,000 clients all through Peninsular Malaysia and the eastern province of Sabah. Its center exercises are age, transmission and circulation of power. TNB is the main Malaysian vitality organization to rank among the best 50 vitality organizations in Asia in 2006 (in view of the Platts’s study of the best 250 Global Energy Companies) while universally it is positioned as 168th. TNB was shaped in 1990 by the Electricity Supply Successor Company Act 1990, as the replacement of the National Electricity Board of the States of Malaya (Lembaga Letrik Negara Tanah Melayu). It was recorded on the Bursa Saham Securities Berhad in the year 1990. TNB Group right now has a total force gracefully framework producing limit of around 11,200 MW. In Peninsular Malaysia, TNB adds to 55 percent of the all out industry limit through six warm stations and three significant hydroelectric plans. It likewise deals with the transmission organize I. e. National Grid which joins TNB power stations and IPPs to the circulation organize. The National Grid is connected by means of 132kV HVAC and 300 kV HVDC interconnection to Thailand and 230kV links to Singapore. TNB’s dispersion arrange is overseen through a far reaching dissemination framework; client care focuses and calls the board habitats. 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The Group strategic â€Å"We Are Committed to Excellence in Our Products and Services† FINANCIAL ANALYSIS (1998 †2007) The motivation behind this section will cover the investigation of fiscal report from year 1998 to 2007 of Tenaga Nasional Berhad (TNB) to help assess the working execution and money related positions. Working execution examination centers around how well the association is coordinating incomes and costs or uses while money related position investigation centers around how very much situated the association is to take care of its tabs. The Groups head exercises are creating, transmitting, circulating, working and selling power . Different exercises incorporate fixing, testing and keeping up power plants, giving building, acquirement and development administrations for power plants related items, amassing and fabricating high voltage switchgears, coal mining and exchanging . Activities are done in Malaysia, Mauritius, Pakistan, India and Indonesia. Gainfulness Ratio And Sales Revenue Profitability proportion has expanded colossally from a negative 28% in 1998 to a positive 18% in 2007. This shows how well TNB is performing by dissecting benefit earned comparative with deals, complete resources and total assets. The Group recorded a 14. percent development in income to RM23,320. 4 million in FY2007 from RM20,384. 2 million in FY2006 and 110 percent development in income from RM11,075. 6 million in FY1998. This can be found in a stunned ascent and was driven by different factors, for example, the usage of the new levy structure which produced results in Y2006, remote trade interpretation gains and a 5. 3 percen t expansion in power request. This is additionally reflected by higher power deals which expanded by RM2. 7 billion or 13. 6% and cost reserve funds. EBITDA expanded to 37. 6 percent contrasted with 35. percent a year ago while net benefit expanded by 90. 9 percent from RM2,126. 9 million (Y2006) to RM4,061. 1 (Y2007) million which is practically twofold the sum; and furthermore an immense increment from lost RM3,093. 9 in Y1998. TABLE 1:TNB PROFITABILITY RATIOS 1998 2007 Ratio/Year1998199920002001200220032004200520062007 NET PROFIT MARGIN-0. 280. 070. 100. 150. 060. 060. 050. 070. 100. 17 ROA-0. 070. 020. 030. 040. 020. 020. 010. 020. 030. 06 ROE-0. 240. 060. 090. 130. 050. 070. 050. 080. 110. 17 TABLE 2: TNB CHANGES IN SALES REVENUE 1998 †2007 RM/Year1998199920002001200220032004200520062007 Deals Revenue (RM million)11075. 6011716. 1013220. 00 13,951. 80 15375. 1016457. 8017712. 1018326. 4019707. 4022384. 00 FIGURE 1 FIGURE 2 FIGURE 3 FIGURE 4 Leverage Management Apart from enrolling its most elevated benefit ever, the Group has for the past diminished its advance from RM27. 1 billion in Y2006 to RM23. 9 billion in Y2007. For as far back as 3 years, a significant rebuilding of credit has been finished. As should be obvious of RM32. 4 billion in Y2004 to RM23. 9 billion in Y2007, mirroring a RM8. 5 billion or 26. 2 percent decrease. During a similar period, TNB has figured out how to gather RM553 million from significant reprobate indebted individuals and furthermore eduction in burglary. Because of the different cost the executives activities embraced by the Management, the Company has acknowledged around RM2. 4 billion as far as worth creation since 2004. TNB likewise observed expanding outside investors’ enthusiasm for its offers, when remote shareholding arriv ed at 28. 4 percent in May 2007; it’s most elevated since the Company’s privatization. Given the proceeded with solid money related results, the Company is ready to embrace proper development openings inside its center business zones. TABLE 5: TNB LEVERAGE MANAGEMENT RATIO 1998 2007 Proportion/Year1998199920002001200220032004200520062007 DEBT RATIO0. 70. 70. 70. 70. 70. 70. 70. 70. 70. 6 DEBT-TO-EQUITY2. 22. 41. 91. 72. 12. 22. 21. 861. 40. 78 FIGURE 5 FIGURE 6 Earnings Per Share During the year 2007, the Board declared a profit strategy to give steady and feasible profits to investors while keeping up an effective capital structure and guaranteeing adequate financing for future development. Under this arrangement, TNB will appropriate 40-60 percent of the Company’s yearly free income as profits. In that capacity, the Board of Directors is suggesting a last gross profit of 16. sen per conventional offer less personal assessment of 26 percent to investors of the Company. Together with the break profit of RM632 million, the absolute profit proclaimed for this Financial Year adds up to an expected RM1,154. 5 million. From track record Y1998 to Y2007, Y2007 has the most noteworthy payout. This difference in a negative EPS of 99. 8 sen in Y1998 to a turnaround positive 94. 9sen in Y2007 (a 81% expansion contrast with Y2006 of 52. 5sen). TABLE 6 : CHANGES IN EPS 1998 2007 Ratio/Year1998199920002001200220032004200520062007 EPS-99. 824. 942. 967. 830. 734. 126. 132. 052. 594. 9 FIGURE 7 Liquidity Ratio The present proportion can give a feeling of the productivity of a companys working cycle or its capacity to transform its item into money. It quantifies a companys capacity to pay momentary commitments. Liquidity proportions measure the momentary capacity of the substance to pay its developing commitments and to address surprising issues for money. According to the above figuring, current proportion and fast apportion for TNB decline from year 1998 to 2000 yet increment from 2000 to 2007. The expansion in both present and snappy proportions from 2000 to 2007 demonstrates improvement in liquidity (Current proportion from 0. multiple times in 2000 expanded to 1. times in 2007; speedy proportion from 0. multiple times in 2000 to 1. 2 out of 2007). The present proportion implies for each dollar of current liabilities, in year 2007, TNB has $1. 50 of current resources contrast with 1998 which has just $0. 80. While for brisk proportion, TNB performed very well as well. Proportion expande d from year 2000 to 2007. The pinnacle was in year 2004 with the fast proportion of 1. 4. The organization is ‘cash rich’ and ready to take care of transient commitments without depending on the offer of inventories. TABLE 4: TNB LIQUIDITY RATIO 1998 2007 Ratio/Year1998199920002001200220032004200520062007 CURRENT RATIO0. 0. 70. 50. 70. 80. 91. 71. 21. 41. 5 QUICK RATIO0. 60. 50. 40. 60. 60. 51. 411. 11. 2 FIGURE 8 FIGURE9 Fixed Assets Turnover Assets the board proportions measure how adequately TNB is dealing with its benefits. Fixed resources turnover proportion for the organization is expanding from the year 1999 to 2007, from 0. 27 to 0. 41, 51% improvement more than 9 years of business activity. Over the 9 years TNB’s all out resources turnover proportion expanded from 0. multiple times in 1999 to 0. multiple times in 2007. This demonstrates the organization is producing adequate volume of business given its absolute resources venture. Deals expanded, a few resources were sold, or a mix of these means had been taken. TABLE 3: TNB ASSET MANAGEMENT RATIOS 1998 †2007 Ratio/Year1998199920002001200220032004200520062007 FIXED-ASSET TURNOVER0. 280. 270. 290. 290. 300. 320. 330. 350. 370. 41 TOTAL ASSET TURNOVER0. 260. 250. 260. 260. 270. 270. 280. 300. 310. 34 FIGURE 10 FIGURE 11 Executive Summary In synopsis, it very well may be seen that Tenaga Nasional Berhad has expanded its exhibition consistently for as far back as ten years. It has figured out how to improve its exhibition from misfortunes to consistent development of income and benefit. It has done by consistently expanding it