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 likewise the biggest force organization in Southest Asia with RM65 billion worth of benefits serving more than 6,000,000 clients all through Peninsular Malaysia and the eastern province of Sabah. Its center exercises are age, transmission and conveyance 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 review 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 creating 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 additionally deals with the transmission organize I. e. National Grid which joins TNB power stations and IPPs to the conveyance arrange. The National Grid is connected by means of 132kV HVAC and 300 kV HVDC interconnection to Thailand and 230kV links to Singapore. TNB’s dissemination organize is overseen through a far reaching conveyance framework; client assistance focuses and calls the executives communities. 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The Group crucial 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 budget report from year 1998 to 2007 of Tenaga Nasional Berhad (TNB) to help assess the working execution and monetary positions. Working execution investigation centers around how well the association is coordinating incomes and costs or consumptions while money related position examination centers around how very much situated the association is to cover its tabs. The Groups head exercises are producing, transmitting, dispersing, working and selling power . Different exercises incorporate fixing, testing and keeping up power plants, giving designing, obtainment and development administrations for power plants related items, amassing and producing high voltage switchgears, coal mining and exchanging . Activities are done in Malaysia, Mauritius, Pakistan, India and Indonesia. Productivity Ratio And Sales Revenue Profitability proportion has expanded hugely from a negative 28% in 1998 to a positive 18% in 2007. This shows how well TNB is performing by breaking down 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 an amazed ascent and was driven by different factors, for example, the execution of the new levy structure which produced results in Y2006, outside trade interpretation gains and a 5. 3 per cent expansion in power request. This is likewise 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 noteworthy benefit ever, the Group has for the past decreased its advance from RM27. 1 billion in Y2006 to RM23. 9 billion in Y2007. For as long 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 account holders and furthermore eduction in robbery. Because of the different cost the board activities attempted by the Management, the Company has acknowledged around RM2. 4 billion as far as worth creation since 2004. TNB likewise observed expanding remote investors’ enthusiasm for its offers, when outside shareholding arrived at 28. 4 p ercent in May 2007; it’s most elevated since the Company’s privatization. Given the proceeded with solid budgetary results, the Company is ready to embrace proper development openings inside its center business regions. 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 reported a profit strategy to give steady and supportable profits to investors while keeping up an effective capital structure and guaranteeing adequate financing for future development. Under this strategy, TNB will circulate 40-60 percent of the Company’s yearly free income as profits. Accordingly, the Board of Directors is suggesting a last gross profit of 16. sen per standard offer less personal duty of 26 percent to investors of the Company. Together with the between time profit of RM632 million, the complete 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 transient capacity of the element to pay its developing commitments and to address sudden issues for money. According to the above figuring, current proportion and speedy apportion for TNB decline from year 1998 to 2000 however 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; snappy proportion from 0. multiple times in 2000 to 1. 2 of every 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 snappy proportion, TNB performed very well as well. Proportion expa nded from year 2000 to 2007. The pinnacle was in year 2004 with the brisk 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 successfully 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 shows the organization is producing adequate volume of business given its complete resources venture. Deals expanded, a few resources were sold, or a blend 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 outline, it very well may be seen that Tenaga Nasional Berhad has expanded its presentation consistently for as long as ten years. It has figured out how to improve its presentation from misfortunes to consistent development of income and benefit. It has done by consistently expanding it