The group’s balance sheet is also set to improve in 1H23, given the stability of global energy prices.
HLIB Research said TNB’s management has guided for an attractive dividend of 28 sen to 30 sen for the second half of financial year 2022 and potentially higher dividend in FY23, as cash flow continues to improve under the recently approved imbalance cost pass-through of RM16.2bil. may dish out higher dividends as the cash flow of the utility giant continues to improve.
“TNB will be able to recover RM10.8bil through government subsidies and RM5.4bil through a higher tariff surcharge of 3.7 sen to 20 sen a kilowatt hour in 1H23,” said HLIB in a note to clients following an update with the power group’s management. In terms of earnings, HLIB said management has guided that earnings for 4Q22 would be seasonally lower quarter-on-quarter due to the accelerating operating expenditure, as well as lower contributions from its own hydropower generation.
The research firm’s back-of-the-envelope calculations indicate an attractive 28 sen to 30 sen per share for 2H22, versus the 20 sen per share in 1H22 and 18 sen per share in 2H21.