18 theSun | THURSDAY APRIL 16 2009

business

KLCI 956.68 2.97 Nikkei 8,742.96 99.72

STI 1,905.99 8.97 TSEC 5,875.19 17.49
Hang Seng 15,669.62 89.46 KOSPI 1,333.09 9.54
SCI 2,536.06 8.88 S&P/ASX200 3,747.50 5.40

TNB pre-tax profit Malaysia and

plunges to RM42.7mil
KUALA LUMPUR: Tenaga Nasional
Bhd’s (TNB) pre-tax profit for the first-
half year ended Feb 28, 2009 plunged to
RM42.7 million from RM2.86 billion in
the corresponding period last year.
In a statement here yesterday, the
utility giant attributed the lower profit
to higher operating expenses in the first
quarter of 2009 financial year (FY) as
well as the impact of foreign exchange
translation loss of RM1.53 billion from
the weakening of the ringgit against the
US dollar and the yen.
It said revenue, however, rose to
RM14.32 billion from RM12 billion
previously.
TNB said comparing its performance
for the first half of FY2009 against the
corresponding period in FY2008, oper-
ating expenses increased by 30.7% to
RM12.426 billion for the current period.
It said with the decline in electricity
demand, especially in the second quarter
2009, revenue for the six-month period
FY2009 only increased by 19.2%.
“The higher operating expenses in-
curred were principally from the overall
higher average contracted coal prices of
US$100.9/metric tonne (mt) for the six-
month period compared to US$53.9/mt
in the corresponding period of FY2008.
“This caused the earnings before
interest, taxes, depreciation and amorti-
sation (EBITDA) margin to decline from
37.1% to 26.3% in FY2008 and FY2009
respectively,” it said.
TNB said electricity demand growth
in Peninsular Malaysia in the second
quarter FY2009 registered a sharp drop of
(9.2%) when compared to first quarter.
“Among the factors are numerous
and extended festive holidays, the short
February month as well as the combina-
tion of three-day work week declared
by a number of factories, reduction in
factory shifts as a result of the decline in
export demand and over-stockpile posi-
tion at several factories,” it said.
The group reported an economic loss
of RM786.3 million for the period com-
pared to an economic loss of RM310.1
million reported last year.
It said electricity demand in the
peninsula was the main driver of the
group’s earnings growth.
“The slowdown in economic activ-
ity and the declining exports, which
affected the industrial sector, caused
TNB to register an unprecedented (3.2%)
demand growth for the six-month period
ended Feb 28, 2009,” it said.
TNB said operationally, higher fuel
cost and payments to independent power
producers continue to impinge on the
group’s profitability wherein operating
expenditure increased by RM2.9 billion,
or 30.7%, in the previous year.
It said while the higher tariff approved
earlier on July 1, 2008 mitigated the ris-
ing operating expenditure particularly
fuel cost, the lower demand growth has
also resulted in a lower dispatch from
the coal-fired power plants thereby
improving profit margins.
Furthermore, it said, the more stable
coal price for the year would ease the
financial burden although a weaker
ringgit will lessen the advantage.
Meanwhile, the board of directors said
the financial performance for FY2009
would be lower than the previous year
and would remain weak. – Bernama
Singapore
expand air
services pact
SINGAPORE: Malaysia and Singapore
have agreed to expand their bilateral
air services pact, a move that will open
new destinations to carriers from both
countries.
The two sides also agreed to al-
low carriers to increase the number
of flights to existing destinations in
Barca Malaysia including Penang, Lang-
draw kawi, Kuching and Kota Kinabalu,
takes Singapore’s transport ministry said
late Tuesday.
heat off With the newly expanded pact,
Klinsie carriers from both countries can offer
pg 30 services to six new Malaysian destina-
tions – Ipoh, Kuala Terengganu, Kuan-
tan, Malacca, Sandakan and Tawau,
the ministry said in a statement.
“This new agreement is important
for both countries, as the enhanced
connectivity further boosts economic
and tourism linkages between our two
countries,” said Choi Shing Kwok, the
ministry’s permanent secretary.
Officials met in Singapore on Tues-
day where they agreed to expand the
pact.
The enhanced deal is the latest
in a series of moves to liberalise air
services between the neighbours.
In November, budget carriers from
the two sides were allowed to operate
flights between Singapore and Kota
Kinabalu, Kuching and Miri.
The lucrative Singapore-Kuala
Lumpur route was opened in February
last year to budget airlines, ending
30 years of dominance by national
carriers. – AFP

M’sia’s economy to shrink 2.2%, says MIER

KUALA LUMPUR: The Malaysian
Institute of Economic Research
(MIER) has revised downwards the
country’s gross domestic product
(GDP) forecast this year to -2.2%
from 1.3% earlier on the back of
export slump arising from the
global economic turmoil.
The private think-tank said it
is almost certain that Malaysia’s
growth will slide into a technical
recession in the first half of 2009.
It said exports are expected to
be reduced by 24%.
“The crisis has not hit the bottom
and if exports shrink adversely, the
downturn could be more harmful,”
MIER executive director Prof Datuk
Dr Mohamed Ariff Abdul Kareem
said in its 14th Corporate Economic
Briefing yesterday.
Mohd Ariff said, however, the
economy overall is actually still
okay and the -2.2% forecast is still
considered mild compared to other
countries in the region.
MIER said the Malaysian
economy will recover gradually to
3.3% in 2010. It had earlier forecast
growth of 3.8% for next year.
Bank Negara Malaysia (BNM) had
projected the country’s economy to
contract or grow by 1% this year.
The government has introduced
two economic stimulus packages
worth a combined RM67 billion to
boost the economy affected by
global economic recession.
Mohamed Ariff said the benefits
from the two stimulus plans can only
be seen by year-end and additional
package may be needed.
“I’m thinking of another RM10
billion but the third package should
be done in a different way and in
much more effective manner.
“The government, however,
must make sure the first and second
packages are well implemented be-
fore thinking of another package,”
he said.
He said the country has an ad-
equate liquidity and resources to
fund another stimulus package.
Mohamed Ariff said BNM still
has room to reduce the overnight
policy rate to 1% from the current
2%.
BNM will hold its monetary policy
committee meeting on April 29.
He, however, expressed con-
cern that the low interest rate may
depressed the performance of the
ringgit, which was currently traded
at RM3.60 to the US dollar.
“The lower rate can also hurt
savers and those who rely on
deposits to generate income,” he
said.
Mohamed Ariff said MIER wants
the ringgit to be internationalised to
strengthen and boost demand for
the local currency.
“It is time for the ringgit to be
traded offshore during this current
economic crisis as it provides a
positive psychological impact on
the economy,” he said.
He said the stronger ringgit
would not have negative impact
on exports as external demand
played a greater role in influencing
the export trend compared to the
exchange rate. – Bernama

UBS to cut 8,700 jobs after posting new losses

ZURICH: Embattled Swiss bank
UBS yesterday said it would slash
8,700 jobs in a bid to cut costs after
it reported fresh losses for the first
three months of this year.
Switzerland’s biggest bank
said its losses for the first quarter
reached about two billion francs
(RM6.3 billion), incurred on
illiquid assets that have now been
transferred to a fund created by
the Swiss National Bank.
UBS has been struggling to
recover after losing billions in the
financial crisis. In order to make
“substantial cost savings” of up to
four billion francs, the bank said
it would make thousands more
redundant.
“Major job cuts are unfortu-
nately unavoidable. UBS expects
to reduce the number of its
employees to about 67,500 in
2010,” said the bank, which em-
ployed 76,200 people at the end
of March.
The latest round of cuts comes
on top of 11,000 job cuts which
have been announced since Oc-
tober 2007.
The bank’s new chief execu-
tive, Oswald Gruebel, warned that
UBS was not out of the woods.
“You should not assume that
this will bring about a marked
improvement in our results as
early as the next few quarters.
Our outlook remains cautious
and we face many uncertainties,”
he said in a speech to sharehold-
ers during the bank’s annual
general meeting.
The bank’s shares tum-
bled 8.67% at opening, before
regaining ground at 0800GMT
(4pm in Malaysia), when it
was trading down 2.6% at 12.94
francs. – AFP