Tnb-Financial Analysis Essay Example

Tnb-Financial Analysis Paper INTRODUCTION 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 largest utility company in Malaysia. It is also the largest power company in Southest Asia with RM65 billion worth of assets serving over six million customers throughout Peninsular Malaysia and the eastern state of Sabah. Its core activities are generation, transmission and distribution of electricity. TNB is the only Malaysian energy company to rank among the top 50 energy companies in Asia in 2006 (based on the Platts’s survey of the top 250 Global Energy Companies) while internationally it is ranked as 168th. TNB was formed in 1990 by the Electricity Supply Successor Company Act 1990, as the successor of the National Electricity Board of the States of Malaya (Lembaga Letrik Negara Tanah Melayu). It was listed on the Bursa Saham Securities Berhad in the year 1990. TNB Group currently has a complete power supply system generating capacity of about 11,200 MW. In Peninsular Malaysia, TNB contributes to 55 percent of the total industry capacity through six thermal stations and three major hydroelectric schemes. It also manages the transmission network i. e. National Grid which links TNB power stations and IPPs to the distribution network. The National Grid is linked via 132kV HVAC and 300 kV HVDC interconnection to Thailand and 230kV cables to Singapore. TNB’s distribution network is managed through a comprehensive distribution system; customer service centres and calls management centres. We will write a custom essay sample on Tnb-Financial Analysis specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Tnb-Financial Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Tnb-Financial Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Through its subsidiaries, TNB is also involves in the manufacturing of transformer, high voltage switchgears and cables, provision of professional consultancy services, architectural, civil and electrical engineering works and services, repair and maintenance, research and development and project management services. TNB also offers higher education through its university – University Tenaga Malaysia (Uniten). The Group mission is â€Å"We Are Committed to Excellence in Our Products and Services† FINANCIAL ANALYSIS (1998 – 2007) The purpose of this chapter will cover the analysis of financial statement from year 1998 to 2007 of Tenaga Nasional Berhad (TNB) to help evaluate the operating performance and financial positions. Operating performance analysis focuses on how well the organization is matching revenues and expenses or expenditures while financial position analysis focuses on how well positioned the organization is to pay its bills. The Groups principal activities are generating, transmitting, distributing, operating and selling electricity . Other activities include repairing, testing and maintaining power plants, providing engineering, procurement and construction services for power plants related products, assembling and manufacturing high voltage switchgears, coal mining and trading . Operations are carried out in Malaysia, Mauritius, Pakistan, India and Indonesia. Profitability Ratio And Sales Revenue Profitability ratio has increased tremendously from a negative 28% in 1998 to a positive 18% in 2007. This shows how well TNB is performing by analyzing profit earned relative to sales, total assets and net worth. The Group recorded a 14. per cent growth in revenue to RM23,320. 4 million in FY2007 from RM20,384. 2 million in FY2006 and 110 per cent growth in revenue from RM11,075. 6 million in FY1998. This can be seen in a staggered rise and was driven by various factors such as the implementation of the new tariff structure which took effect in the middle of Y2006, foreign exchange translation gains and a 5. 3 per cent increase in electricity demand. This is also reflected by higher electricity sales which increased by RM2. 7 billion or 13. 6% and cost savings. EBITDA increased to 37. 6 per cent compared to 35. per cent last year while net profit increased by 90. 9 per cent from RM2,126. 9 million (Y2006) to RM4,061. 1 (Y2007) million which is almost double the amount; and also a huge increase from a loss of 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 Sales 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 registering its highest profit ever, the Group has for the past reduced its loan from RM27. 1 billion in Y2006 to RM23. 9 billion in Y2007. For the past 3 years, a major restructuring of loan has been done. As we can see of RM32. 4 billion in Y2004 to RM23. 9 billion in Y2007, reflecting a RM8. 5 billion or 26. 2 per cent reduction. During the same period, TNB has managed to collect RM553 million from major delinquent debtors and also eduction in theft. Due to the various cost management initiatives undertaken by the Management, the Company has realised around RM2. 4 billion in terms of value creation since 2004. TNB also saw increasing foreign investors’ interest in its shares, when foreign shareholding reached 28. 4 per cent in May 2007; it’s highest since the Company’s privati sation. Given the continued strong financial outcomes, the Company is poised to undertake appropriate growth opportunities within its core business areas. TABLE 5: TNB LEVERAGE MANAGEMENT RATIO 1998 2007 Ratio/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 announced a dividend policy for the purpose of providing stable and sustainable dividends to shareholders while maintaining an efficient capital structure and ensuring sufficient funding for future growth. Under this policy, TNB will distribute 40-60 per cent of the Company’s annual free cash flow as dividends. As such, the Board of Directors is recommending a final gross dividend of 16. sen per ordinary share less income tax of 26 per cent to shareholders of the Company. Together with the interim dividend of RM632 million, the total dividend declared for this Financial Year amounts to an estimated RM1,154. 5 million. From track record Y1998 to Y2007, Y2007 has the highest payout. This change of a negative EPS of 99. 8 sen in Y1998 to a turnaround posit ive 94. 9sen in Y2007 (an 81% increase compare to 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 current ratio can give a sense of the efficiency of a companys operating cycle or its ability to turn its product into cash. It measures a companys ability to pay short-term obligations. Liquidity ratios measure the short-term ability of the entity to pay its maturing obligations and to meet unexpected needs for cash. As per the above calculation, current ratio and quick ration for TNB decrease from year 1998 to 2000 but increase from 2000 to 2007. The increase in both current and quick ratios from 2000 to 2007 indicates improvement in liquidity (Current ratio from 0. 5 times in 2000 increased to 1. times in 2007; quick ration from 0. 4 times in 2000 to 1. 2 in 2007). The current ratio means for every dollar of current liabilities, in year 2007, TNB has $1. 50 of current assets compare to 1998 which has only $0. 80. While for quick ratio, TNB performed quite well too. Ratio increased from year 2000 to 2007. The peak was in year 2004 with the quick ratio of 1. 4. The company is â €˜cash rich’ and able to pay off short-term obligations without relying on the sale 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 management ratios measure how effectively TNB is managing its assets. Fixed assets turnover ratio for the company is increasing from the year 1999 to 2007, from 0. 27 to 0. 41, 51% improvement over 9 years of business operation. Over the 9 years TNB’s total assets turnover ratio increased from 0. 25 times in 1999 to 0. 34 times in 2007. This indicates that the company is generating sufficient volume of business given its total assets investment. Sales increased, some assets were sold, or a combination of these steps 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 summary, it can be seen that Tenaga Nasional Berhad has increased its performance quite steadily for the past ten years. It has managed to improve its performance from losses to steady growth of earnings and profit. It has done by steadily increasing its tariff, earnings from foreign exchange translation gains and increase in electricity demand. Tenaga Nasional Berhad are also able to manage its debt by decreasing it quite considerably. The company managed to collect its debt from major delinquent debtors and also reduction in theft. Though its total revenue increases, there is large escalation in total operating cost. This in turns has resulted into slight decrease of its profit margin. It has shift its operation towards fuel- fix in order to reduce the cost of coal usage and also maximizing its gas and hydro usage from its multi-fuel plants. The rising coal price has increase the total fuel cost. However its foreign exchange gain and continued effort in cost management has increased its pre tax profit. TNB would need to resort to the capital market to finance its capital expenditure requirements due to increases in operating cost and requirement to enhance its electricity supply reliability. TNB also has plans to further increase its tariff in 2008 due to the increasing cost i. e. the increase in the selling price of independent power plant (IPP) where it purchases some of its energy requirement This has lead to a lot of debate in the government and also its consumer. There are pressures for TNB to review its current contract with the various IPP to ensure that TNB will be able to fully benefit and earn a profit from its agreement with them. It remains to be seen if TNB will do so despite pressure from its consumer to not increase the tariff. In conclusion, TNB should be able to sustain its current growth and further increase if profit. However TNB must be mindful of its operational cost in order for it to sustain its profit. REFERENCE ?Tenaga Nasional Berhad Annual Reports 1999-2007 ?www. tnb. com. my ?http://en. wikipedia. org/wiki/Tenaga_Nasional

Free Essays on Ccna

OSPF Terminology Neighbor – A neighbor refers to a connected (adjacent) router that is running an OSPF process with the adjacent interface assigned to the same area. Neighbors are found by Hello packets. Adjacency - An adjacency refers to the logical connection between a router and its corresponding designated routers and backup designed routers. Link – In OSPF, a link refers to a network of a router interface assigned to any given network. Within OSPF, link is synonymous with interface. Interface – An interface is a physical interface on a router. When an interface is added to the OSPF process, it is considered by OSPF as a link. If an interface is up than a link is up. Link State Advisement – (LSA) is an OSPF data packet containing link state and routing information that is shared among OSPF routers. Designated router – (DR) is only used when the OSPF router is connected to a broadcast (multi-access) network. Backup Designated router – (BDR) is a hot standby for the DR on broadcast links. OSPF areas – OSPF areas are similar to EIGRP Autonomous Systems. Areas are used to establish a hierarchical network. It uses four types of areas. Area boarder router – (ABR) is a router that has multiple area assignments. An interface may belong to only one area. If a router has multiple interfaces and if any of these interfaces belong to different areas, the router is considered ABR. Autonomous system boundary router – (ASBR) is a router with an interface connected to an external network or a different AS. An external network or AS refers to an interface belonging to a different routing protocol. Non-broadcast multi-access – (NMBA) networks are networks such as Frame Relay, X.25, and ATM. This type of network allows for multi-access but has no broadcast ability like Ethernet. Broadcast (Multi-access) – Networks such as Ethernet allow multiple access as well as provide broadcast ability. Point-to-Point – This t... Free Essays on Ccna Free Essays on Ccna OSPF Terminology Neighbor – A neighbor refers to a connected (adjacent) router that is running an OSPF process with the adjacent interface assigned to the same area. Neighbors are found by Hello packets. Adjacency - An adjacency refers to the logical connection between a router and its corresponding designated routers and backup designed routers. Link – In OSPF, a link refers to a network of a router interface assigned to any given network. Within OSPF, link is synonymous with interface. Interface – An interface is a physical interface on a router. When an interface is added to the OSPF process, it is considered by OSPF as a link. If an interface is up than a link is up. Link State Advisement – (LSA) is an OSPF data packet containing link state and routing information that is shared among OSPF routers. Designated router – (DR) is only used when the OSPF router is connected to a broadcast (multi-access) network. Backup Designated router – (BDR) is a hot standby for the DR on broadcast links. OSPF areas – OSPF areas are similar to EIGRP Autonomous Systems. Areas are used to establish a hierarchical network. It uses four types of areas. Area boarder router – (ABR) is a router that has multiple area assignments. An interface may belong to only one area. If a router has multiple interfaces and if any of these interfaces belong to different areas, the router is considered ABR. Autonomous system boundary router – (ASBR) is a router with an interface connected to an external network or a different AS. An external network or AS refers to an interface belonging to a different routing protocol. Non-broadcast multi-access – (NMBA) networks are networks such as Frame Relay, X.25, and ATM. This type of network allows for multi-access but has no broadcast ability like Ethernet. Broadcast (Multi-access) – Networks such as Ethernet allow multiple access as well as provide broadcast ability. Point-to-Point – This t...

The Clarinet Essay Example | Topics and Well Written Essays - 750 words

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Seneca, On the Shortness of Time Essay Example | Topics and Well Written Essays - 250 words

Seneca, On the Shortness of Time - Essay Example We understand the value of life through living. Those who delay and linger will always waste their time thinking about the future and not the present. In life, many people start living when their end is near. Long life is not guaranteed by chronological age. This only reminds us that one exists for a very long time. This is compared to the man whose ship has failed to sink but hit in a storm and later tossed by waves in circles. Such kind of a man usually thinks that he has traveled for a long way while in the real sense he has just been going in waves. These kinds of people realize how time passes quickly during their mortal danger. During this dangerous moment, they try their level best to use money to lengthen their lives. In other situations such kind of people uses their time as if it is a commodity which can be easily replaced any moment. Due to the fast movement of time, many people have been mistaken by thinking that it is very easy to postpone the preparations for the coming old age. This is why most people arrive as children at old age. According to the Seneca, life comprises three parts: â€Å"what will be, what is now and what has been†. The past is the only secure part as it is outside control of fate and it cannot be easily hurt. Furthermore, Seneca implies that, ‘what is’ means that the present is short and passing. Thus, if a man occupies himself he will actually have no extra time for mental tranquility. Life is desperate for those who kept piling more riches, power and earthly pleasures and those who wasted time on superfluous matters. These people cheat time through lies and harmful behaviors and always cling towards illusionary youthful images. Thereafter, they wail because they claim their unaccomplished life as they lacked time to enjoy the fruits from their efforts and enjoy their dreams. In contrary, the wise time users are ever willing to march towards the end of their life. They live more years in religious creation,

Hemingway’s The Short Happy Life of Francis Macomber Essay Example for Free

Hemingway’s The Short Happy Life of Francis Macomber Essay The three characters in Hemingway’s The Short Happy Life of Francis Macomber form a triangle in which the relationships are not clear from the beginning. The plot of the short story is not very complicated: during a safari, the rich and handsome Francis Macomber proves to be a coward when he runs off scared while hunting the lion he had wounded.   Ã‚  Ã‚  Ã‚  Ã‚   In fact, the attribute of ‘coward’ is given to him, indirectly, by his wife Margot and by Wilson, the hunter who accompanies them on the expedition. The whole story thus revolves around the killing of the lion, an act which seems to be the ultimate proof of manhood, and, which constitutes therefore a great attraction to women. 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At first she seems to congratulate again the winner, this time her husband: â€Å"’In the car Macombers wife sat very white-faced. ‘You were marvelous, darling,’ she said to Macomber. ‘What a ride.’†(Hemingway, 13) Nonetheless, her admiration soon turns into the fear that her husband will desert her: â€Å"Her face was white and she looked ill.† Again, the fact that Margot kills her husband on purpose coheres with the rest of her instinctive behavior: although the main reason of the killing seems to be his fortune or her social stand which she might lose, it may be that her murder is again instinctive, in the sense that she is afraid of losing the now desirable man, because of his courage. She prefers shooting him, again cohering with the hunt. Her ‘hysterical’ crying over the dead body of her husband do not manage to convince us of her innocence or her pain at the loss: she rather mourns him either because she needs to act in front of the other hunters, or because she has to give up the hero she had been looking for. The way in which she changes her mind after Macomber’s success, and she says that their hunting is by no means a heroic act, clearly demonstrates that she feels trapped, again manifesting her instinctual nature. At the end of the story, she herself is defeated by Wilson, who plainly lets her see that he knows the truth, and seems to enjoy the feeling of being able to submit her to his will, and have her beg: Thats better, ‘Wilson said. ‘Please is much better. Now Ill stop.’(Hemingway, 14) The meanings of Hemingway’s story are thus very complex, as he analyzes the instinctual relationships between men and women, and other instincts, such as that of killing and hunting or of possessing and dominating. Works Cited: Hemingway, Ernest. The Complete Short Stories. New York: Scribner Paperback Fiction, 1998

Free Hamlet Essays: Hamlet, Fortinbras and Leartes :: GCSE Coursework Shakespeare Hamlet

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Lim Goh Tong Essay

Successful business are ofter managed by what type of leaders? Successful business are ofter managed by leaders who know how to mobilize their human resources (HR) to produce better products and service compared to their competitors. b) How can a change of mindset can be the pre-requisite step for building and existing entrepreneurs to stay in the business? A change of mindset can be the pre-requisite step for building and existing entrepreneurs to stay in the business because it having a positive mindset and to step up efforts to deal with constant changes and challenges in a highly competities market place. c) What are the key factors to be considered in the exercise? The key factors to be considered in the exercise are entrepreneur must be smart and resilient in mobilizing all its resources, including HR to move towards common goals and to deal with challenges that affect the business. It requires the creation the creation of a more robust and knowledge business culture with people that deeply understand the business environment. d) What are the key factors to be considered in the exercise? The key factors to be considered in the exercise are considering knowledge as a factor that can make a distint difference and identifying emerging key and new method of conducting business and making it more competitive. e) What the factors to achieve entrepreneurial success to sharpen a company’s competitive adge? The factors to achieve entrepreneurial success to sharpen a company’s competitive adge depends on the ability to attract, retain and develop competent people continuously. f) Why is having leadership ability is important? Having leadership ability is important because it stand in good stead for the entrepreneur to help worker in problem-solving as well as to provide guidance on the right work ethics and maximize the employee’ performance. g) How to be a successful entrepreneur? To be a successful entrepreneur , one should have the ability to plan, arrange and control the business in every aspect. . Based on your understanding, give one example of successful entrepreneur in Malaysia. That constributes a lot in Malaysia economy. Give the strength of his (her) product/service. Lim Goh Tong is classic story of a rag-to-riches story. He migrated from China mainland in his youth. And as fate would have it, the two later became friends when he was on his way to build Genting. From the day he was born until his death, Lim Goh Tong did not speak English, he only communicated in Chinese and Malay language. But his language barrier did not prevent him from negotiating one of the largest contracts around. Financial. His strength could be seen from his early age involved in petty trade. He always keeps some of his revenue for future used and increases his capital. 2. Intellectual . Lim Goh Tong always did a survey and made a feasibility study whether to project to be taken really produce profit or loss. He will not close the deals unless money back guaranteed. 3. Location . Choice of location is gave him ahead of others. Genting Resort was built to encourage local people to enjoy breezy environment near Kuala Lumpur. 4. Diversification on Product Offered. Genting Group has diversified from its initial hotel and resort activities to plantations, properties, paper manufacturing, power generation, oil and gas, electronic commerce and information technology development under Genting Group. 5. Government Rule and Regulation. Genting was extremely advantage after government announced in October 2002 to restrict development of highlands. It will create no competition for Genting Group on their resort business. 6. Product Diversification . Lim Goh Tong knows to play his card. He is not dependent on his Casino business. He has Conglomerate Company dealing in Star Cruise, Property Development, Education, Construction, Oil and Gas, Investment, Plantation, Independent Power Industry and Hospitality. He has well diversified revenue and will not worry on economic trend if collapse in certain industry. 6. Favorable access to distribution net works. Lim Goh Tong relationship with all the Prime Minister of Malaysia make his job easy. He received a pioneer status from Tun Abdul Razak on his Genting business. In 1976 the status was extended another year by Tun Hussin Onn through Tan Sri Mohd Noah who is in-law to Razak and Hussin Onn. 7. Market Trend. Lim Goh Tong always follow the trend from his early involvement in construction industry. After WW2 he bought all unused heavy machinery and reconditioned it before it was sold to tin miner and rubber Estate Company for their rehabilitation work.