Photo shows people exchanging their currencies at a currency exchange in Turkey. TNB’s share price has been hit by weak Turkish lira, analysts observed, even though the group has miniscule earnings contribution from its 30-per cent owned GAMA Enerji based in Turkey. — Reuters photo
KUCHING: Tenaga Nasional Bhd’s (TNB) share price has been hit by weak Turkish lira, analysts observed, even though the group has miniscule earnings contribution from its 30-per cent owned GAMA Enerji based in Turkey.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), TNB’s share price was hit on Monday following a continued fall in the Turkish lira.
“The lira has fallen 24 per cent since late last week,” MIDF Research said.
“TNB has a 30 per cent stake in Turkish based GAMA Enerji, which operates a portfolio of wind, hydro and gas turbine power plants.”
MIDF Research noted that GAMA Enerji generated profit after tax (PAT) of RM52 million in financial year 2017 (FY17). TNB’s share of these profits amounted to RM16 million which accounted for just 0.2 per cent of the group’s earnings.
The research arm also noted that TNB still carries a RM264 million goodwill from the acquisition of the stake in GAMA Enerji.
“If the goodwill is written off, the impact is just a one-off four per cent of TNB’s annual earnings, to give a yardstick.”
On another note, MIDF Research highlighted that it has been reported that GAMA Holdings (GAMA Enerji’s major shareholder) has been looking to restructure US$1 billion worth of debt while at GAMA Enerji level, is looking to refinance a US$500 million loan it took to construct a gas power plant in 2013.
It further highlighted that both GAMA Holdings and GAMA Enerji are private companies, but GAMA Enerji has been reported to be GAMA Holdings’ largest asset.
“There has also been reports of GAMA Holdings’ intention to sell off its 50.5 per cent stake in GAMA Enerji,” the research arm said.
“If the bulk of GAMA Enerji’s debt are foreign debt, there is possibility of a mark-to-market adjustment which could hit earnings by an exceptional amount.”
“While we would presume most of GAMA Enerji’s debt are long term in nature (concession backed), if there is any rollover or refinancing of existing debt, there is likelihood that GAMA will realise some forex loss.”