KUALA LUMPUR: Analyst remains positive on Tenaga Nasional Bhd’s (TNB) venture in Turkey, through its 30 per cent-owned Gama Enerji, as the latter has small earnings contribution to TNB.
MIDF Research said Gama Enerji generated a profit after tax of RM52 million in 2017, which translated into RM16 million to TNB.
This accounted for just 0.2 per cent of TNB’s earnings in 2017. Besdies that, MIDF said TNB still carries 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,” it said.
Yesterday, TNB’s share price was hit following a continued fall in the Turkish Lira. It closed 22 sen or 1.4 per cent lower to RM15.56 on Monday.
TNB has a 30 per cent stake in Gama Enerji, which operates a portfolio of wind, hydro and gas turbine power plants. Gama Holdings owns a 50.5 per cent stake and the remaining 19.5 per cent are held by International Finance Corp and Global Infrastructure Fund.
Meanwhile, MIDF said it has been reported that Gama Holdings 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.
Both Gama Holdings and Gama Enerji are private companies, but Gama Enerji has been reported to be Gama Holdings’ largest asset. There have also been reports of Gama Holdings’ intention to sell off its 50.5 per cent stake in Gama Enerji.
“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 realize some forex (foreign exchange) loss,” it said.
MIDF has maintained its “buy” call on TNB with an unchanged target price of RM16.30.