Tenaga’s Net Income Falls

With coal prices more than doubling in the past twelve months, it was only a matter of time that surging prices would push some producers into losses.

Malaysia's Tenaga Nasional happens to be the latest casualty, reporting its first quarterly profit drop in more than three years. Figures released by the state-controlled power producer show net income fell to 1.06 billion ringgit ($335 million), or 24.43 sen a share in the three months ended February 29, from 1.55 billion ringgit, or 35.7 sen a year earlier.

"Investors are paying full attention to Tenaga's fuel costs," said Pankaj Kumar, who counts the shares among the $460 million he manages at Kurnia Insurans Berhad. Kumar added that "Coal prices have been bugging investors, as that will eat into profit margins."

The Kuala Lumpur-based company stated that this year will be "very challenging", reiterating that profit may decline further.