EVENING 5: TNB to invest RM90 bil in grid over next six years

The Edge TV

In today’s edition of Evening 5 — TNB is planning to invest up to RM90 bil into its grid over the next six years, with nearly half of that going towards energy transition-related capex. Meanwhile, earnings season enters its climax.

Transcript

00:00 [Music]

00:04 TNN intends to invest upwards of $90 billion over the next six years for its grid infrastructure,

00:10 of which 40% will be channeled towards energy transition-related capital expenditure,

00:15 says TNB President and Group CEO, Datuk Baharin Dain.

00:18 In his closing remarks for the Energy Transition Conference 2023,

00:22 Baharin said that it is a key priority of the national utility

00:26 to strengthen our ASEAN interconnection to facilitate its net zero emissions goal.

00:32 He says that parties are committed to making it happen as the interconnection will enable

00:36 better RE ambition, support system security, and open up the gateway to over $6.3 trillion

00:43 of new investments by 2050. He adds that the timing is right to make the ASEAN power grid a

00:49 reality as it is now a matter of our survival. TNB, which operates $62.25 billion worth of regulated

00:57 transmission and distribution assets in the country as at end 2022, has been closely watched

01:03 amid rising interest towards renewable energy capacity installation and the national plan to

01:08 allow RE exports to neighbouring countries. Studies were also made in the past for transmission links

01:14 between East and West Malaysia as well as between West Malaysia and Indonesia,

01:18 according to the International Energy Agency. Development of a flexible cross-border grid

01:23 is one of TNB's three objectives in its 2050 energy transmission pathway, aside from

01:29 decarbonisation of its power generation segment and the empowerment of its prosumers and cross-sector

01:35 electrification.

01:36 Public Bank's second quarter net profit improved by 14% year-on-year to $1.62 billion as a result

01:47 of continued healthy loan and deposit growth, prudent cost management as well as stable asset

01:52 quality. Revenue for the quarter grew by 26% year-on-year from $4.97 billion to $6.26 billion.

01:59 Public Bank also declared a dividend of $0.09 per share. For the first half, net profit rose by

02:06 18% year-on-year to $3.33 billion from $2.82 billion previously, while revenue improved by

02:12 26% to come in at $12.39 billion. Managing Director and CEO Tan Sri Dr Teh Alek said

02:20 net interest income increased by 3.4%, mainly led by the loan and deposit businesses. He said

02:26 non-interest income grew by 5.4% on the back of higher income from forex and stockbroking

02:31 businesses. Teh said with the continued expansion of the Malaysian economy, business prospects for

02:37 the banking sector remain positive. He added that there are also growing opportunities arising from

02:42 the increasing demand for digital banking and ESG products. Teh also addressed Public Bank's move to

02:48 continuously combat scams through the implementation of stronger authentication methods, as well as the

02:54 introduction of a cooling-off period for banking transactions, which are deemed to be abnormal.

03:04 IHH Healthcare has appointed Dr Prem Kumar Nair as its Group Chief Executive Officer,

03:09 effective October 1. Prem is currently the CEO of IHH Singapore, and he will continue to hold

03:15 that position until September 30. At the same time, the hospital operator announced that its Group

03:20 COO, Jo Sim Heng Ju, has decided to return to public service and tendered his resignation.

03:26 This appointment puts an end to IHH's search for a new captain that began in February this year,

03:31 after its previous CEO, Dr Kelvin Loh Tee Kuen, resigned on February 22. Sim had assumed

03:38 Loh's duties during the search. Meanwhile, IHH saw its second quarter net profit halve from $612.1

03:44 million to $301.8 million due to the previous year's high base as a result of exceptional items

03:51 exacerbated by forex losses following the devaluation of the Turkish lira. In contrast,

03:56 revenue for the quarter improved by 7% year-on-year to $4.7 billion, driven by more patients. It was

04:02 a different story for the first half, where earnings grew by 53% year-on-year to $1.7 billion,

04:08 as revenue increased by 15% year-on-year from $8.5 billion to $9.8 billion. Going forward,

04:15 IHH says that it will continue its organic growth path by expanding its bed capacity by around 25%,

04:21 driving productivity and operational efficiencies, while reconfiguring its

04:26 portfolio to improve its returns, with a focus on removing underperforming assets.

04:30 RHB Bank expects the interest margins squeeze the spread banks earn between borrowing and

04:40 lending to ease in the second half, driven by lower competition in the deposit space.

04:45 According to MD and CEO Mohamed Rashid Mohamed, the bank is looking to improve NIM to 1.8% to 1.9%

04:52 for the full year, despite the increase in funding costs and expectation that NIM would continue to

04:57 tighten in the near term. NIM compression in the first quarter was steeper than expected due to

05:02 a pickup in the deposit war between banks. NIM for the quarter contracted to 1.82% from 1.9% in

05:09 the preceding quarter, taking first half NIM to 1.85%. Mohamed Rashid elaborated that RHB would

05:15 defend its retail and current account savings account deposits and continue to maintain cost

05:20 discipline and investing strategically in digital efficiency to manage persistent cost escalation.

05:27 He said that given the expected economic expansion of 4.3% in the second half,

05:32 RHB expects loan growth to be at 4% for the full year against an earlier projection of 4% to 5%.

05:38 For its second quarter, RHB posted a 28% year-on-year increase in earnings to $808.7 million,

05:45 driven by higher allowances for credit losses written back, partly offset by lower net funding

05:50 income and higher operating expenses. Revenue jumped by 37% to $4.05 billion for the quarter.

05:57 RHB declared an interim dividend of $0.15 per share. For the first half, net profit increased

06:03 by 30% to $1.57 billion from $1.21 billion previously, as top line jumped by 38% to $7.97

06:11 billion. Arc Seattle Group's net loss widened to $576.2 million for the second quarter from $106.4

06:24 million a year ago. Revenue for the quarter rose 15.3% year-on-year to $5.99 billion. The group

06:31 attributed the wider loss to the lower share of results from Selkom Aksyata, which is no longer

06:36 a wholly-owned subsidiary following its merger with Digi.com. Its Nepal-based telco Encel also

06:42 saw a non-cash impairment of assets and capital gains tax write-off following the unfavorable

06:47 outcome from the Bilateral Investment Treaty arbitration proceedings in June. However,

06:52 this was offset by a RM402 million gain from the final closing adjustments to the Selkom-Digi merger.

06:59 For the first half, Aksyata's net loss deepened to $502.4 million versus $149.5 million a year

07:06 earlier as revenue increased by 12% year-on-year to $11.4 billion from $10.2 billion previously.

07:14 Despite the loss-making quarter, Aksyata declared an interim dividend of $0.05 per share.

07:19 Chairman Tan Srichara Rizawidjuan says the group is poised to extend its market leadership beyond

07:24 the double-digit top-line growth seen in the first half of FY2023. Group CEO Vivek Sud says

07:31 cash generation, improved balance sheet and capital expenditure to chase growth opportunities

07:36 has been the focus of the first half and that it will remain so for Aksyata for the rest of the

07:42 year. Meanwhile, Vivek said that Aksyata will be easing back on the pace of its capex as it wants

07:47 to be more careful in investing in its frontier markets, particularly those with less favorable

07:52 macroeconomic situations. He says the focus is now on monetizing its current assets and bringing

07:58 down its debt levels. Aksyata has revised its capex guidance lower to $6.5 to $6.8 billion

08:05 for FY2023 from the $7.1 billion guided earlier this year.

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