EVENING 5: TNB’s RM3.977b tax bill quashed

The Edge TV

In today’s edition of Evening 5 — The High Court grants Tenaga Nasional’s judicial review application to set aside almost RM4 billion in tax assessment. Meanwhile, Petronas Chemicals Group says 2QFY2023 net profit fell 66%.

Transcript

00:00 [Music]

00:04 The High Court Appellate and Special Power Division granted a judicial review application

00:09 by TNN to set aside RM3.977 billion in tax assessment for the years 2015 to 2017.

00:17 High Court Judge Datuk Wan Ahmad Farid Wan Saleh agreed with TNB's argument

00:22 that it is in the business of manufacturing electricity and hence entitled to claim

00:28 reinvestment allowance on the CAPEX that it incurred, including for the three assessment

00:32 years, to expand, modernise and automate its business. It is understood that this is one of

00:38 the biggest tax disputes decided by the courts. TNB was also successful in its judicial review

00:44 application last February to set aside a tax assessment of RM1.812 billion for 2018

00:51 on similar reinvestment allowance provisions. The Inland Revenue Board had argued that TNB

00:57 is not entitled to the allowance as it is just a service provider and not classified

01:03 as being in the business of manufacturing electricity, but the court disagreed.

01:07 [Music]

01:12 Petronas Chemicals Group or Petchem saw its second quarter FY2023 earnings

01:18 slump 66% to RM628 million, in line with lower earnings before interest,

01:25 tax depreciation and amortisation and share of profit from joint ventures and associates.

01:30 Top line for the quarter rose by some 8% to RM7.11 billion, largely due to higher sales volumes

01:38 and inclusion of revenue from a recently acquired subsidiary. Petchem declared a first

01:43 interim dividend of RM8 per share for the first half of FY2023. It booked a 70.6% fall in net

01:51 profit to RM1.16 billion, despite posting an 11% jump in revenue to RM14.67 billion.

01:59 On its prospects, Petchem said fertiliser and methanol product prices are forecast to stabilise

02:05 a mature supply in the region. For specialties, the group expects weaker sales and earnings

02:11 development in view of slower industrial growth impacting demand. At the close, Petchem was 1.6%

02:18 higher at RM7.01 a share, giving the group a market capitalisation of RM56.08 billion.

02:25 Seremban-based Matrix Concept Holdings booked a 37.3% jump in first quarter FY2024 net profit

02:38 as the pace of construction activity picked up following the resolution of labour shortage

02:44 issues. Earnings rose during the period to RM64.6 million, while revenue grew 44.6% to

02:51 RM331.43 million on higher contributions from its property development division.

02:58 The company declared a first interim dividend of RM2.5 per share. According to Matrix, the group

03:04 extended its strong sales momentum by securing RM305.3 million worth of new property sales,

03:11 while unbilled sales amounted to RM1.4 billion as at June 30, 2023. This provides secure earnings

03:18 visibility over the next 15 to 18 months. It also expects to continue benefiting from the

03:24 healthy demand trend moving forward, particularly at its flagship Sendayan developments in Negeri

03:30 Sembilan and Bandar Sri Impian in Kelong Johor. Shares on Matrix traded 2.1% higher at RM1.49 a

03:38 piece, valuing the group at RM1.86 billion.

03:41 Communications and Digital Minister Fahmy Fazil is set to meet with local telcos to address the

03:53 additional charges being imposed on subscribers seeking access to the 5G network. Fahmy told the

03:59 press that not all telcos levy extra charges, such as YTL Communications, and that he aims to meet

04:05 the CEOs of the companies to coordinate the matter. Certain mobile number operators in

04:10 Malaysia require subscribers to pay an additional premium ranging between RM3 and RM20 on top of

04:18 existing phone bills to gain access to the 5G network. The minister said the telcos are also

04:24 slated to announce a series of affordable 5G packages come National Day on August 31.

04:30 On the shift to a dual network model, once coverage of populated areas hit 80%,

04:35 Fahmy said DNB will serve half of the nation's telcos, while the remaining half of the industry

04:42 will rely on an entity B, which has yet to be determined.

04:45 Star Media Group saw its second quarter FY2023 net profit more than halved to RM791,000

04:58 as operating costs and taxation increased. Revenue for the quarter advanced 7.7% to RM58.02 million.

05:07 For the first half of FY2023, Star Media's net profit dropped 55.5% to RM1.93 million,

05:15 while top line rose slightly to RM110.01 million. On prospects, Star Media said it remains

05:22 financially prudent and will continue to focus on its revenue enhancement initiatives

05:28 and operational efficiency improvements. The group continues to increase its range of products,

05:34 such as the BM print publication Majority 7, launched in 2022, and the recent introduction

05:40 of its weekly business print publication Starbiz 7. Based on the prevailing market conditions,

05:47 it said it remains cautiously optimistic on its future outlook. Star Media's share price,

05:52 which has risen over 28% year-to-date, finished at S$0.385, for a market capitalization of RM280.61 million.

06:02 [Music]

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