TNB reported full year core net profit that was in line with consensus but 14% below our forecasts. This was mainly due to prudent provisions and a decision to hold off on write-backs given the potential tariff review in December. Stripping out these items, which amount to at least RM440m, the company’s profits would have easily met our forecasts. We expect the provisions to be one-off while recovering electricity demand should spur growth for TNB in FY10 even as it has to use more coal given the constraints in gas supply. With our forecasts largely intact, we maintain Buy and at a fair value of RM9.38.
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