Malaysia’s largest power company Tenaga Nasional Bhd (TNB) posted a 27.5% increase in pre-tax profit for the six months to end-February, helped by rising electricity demand and falling fuel costs, according to a Business Times report.

Its chairman, Amar Leo Moggie, said the company’s pre-tax profit and non-cash items increased to RM1.15 billion, while after-tax profit but before non-cash items increased by 28.9% to RM1.1 billion. (US$1=RM3.8).

“The increase in demand is a reflection of the country’s economic growth, while at the same time we managed to reduce our operating costs, using a mix of fuels, particularly on coal,” he said in a media briefing to announce Tenaga’s first-half financial results in Kuala Lumpur.

According to the report, Mr Moggie said that power demand stood at 11,856 megawatts. He said fuel cost, the utility’s second biggest cost component, is also falling as the company is using cheaper fuel like coal to reduce dependence on natural gas.

Coal provided 27% of Peninsular Malaysia’s power needs in the six months to end-February, up from 10% in the same period a year earlier.

“The average fuel cost was 3.2 cents per kilowatt hour in the first six months compared with 3.7 cents in fiscal 2003,” he added, said the report.

He said Tenaga earned a revenue of RM8.5 billion during the period, up 6.7% from the previous year.

He said Tenaga posted an operating profit of RM1.8 billion compared with RM1.4 billion over the same period last year.

However, he said Tenaga’s net profit was only RM30.7 million in the six months to end-Feruary, against RM583.4 million over the corresponding period last year on account of higher forex losses.

He said Tenaga’s forex translation loss was RM543.8 million in the first half year ended February 29, against RM9.7 million the previous financial year