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Unknown Executive: Ladies and gentlemen, [Foreign Language] National Energy Centre. Welcome to University Tenaga Nasional. You are now in Dawan Silara, National Energy Centre, NEC, UNITEN. Please follow these instructions in the event of emergency. Please remain calm and stand by for further instructions to evacuate. In the event of an emergency, the alarm will be activated and ring continuously. Please make sure you make your way calmly to the closest emergency exits. Please exit the building immediately and in an orderly manner. Please proceed to the designated assembly area. Please remain at the assembly area until you receive further instructions. Please seek assistance from personnel on duty in cases of other emergencies. Your cooperation is highly appreciated. May this ceremony run smoothly and successfully. Thank you. Good morning, everyone. Thank you for joining our third quarter FY 2025 Analyst Briefing. A very warm welcome to Yang Berbahagia Datuk Ir. Megat Jalaluddin Bin Megat Hassan, President and Chief Executive Officer of Tenaga Nasional Berhad; and Chief Financial Officer, Mr. Badrulhisyam bin Fauzi. I also extend a very warm welcome to each and every one of you joining us today in this hub. We also have 70 attendees joining virtually via Webex. Today's session will be covered in 2 parts. Our President and CEO, Datuk Megat, will first provide an overview of the TNB's group strategy and outlook, followed by our Chief Financial Officer, Mr. Badrul, who will share the TNB's third quarter FY 2025 performance. We will then open for Q&A before we end the session at 11 a.m. With that, I am pleased to invite Datuk Ir. Megat Jalaluddin Bin Megat Hassan to kick off our session. Thank you.
Megat Bin Megat Hassan: [Foreign Language] A very good morning, [Foreign Language] First and foremost, thank you very much for being here to be in the session so where we share our third quarter performance. And I would like to welcome everyone to this new, I would say, development by Tenaga Nasional, which is the National Energy Centre, which is part of our unit purpose in which we would like to support the government agenda with respect to the energy transition. So this is where we hope that we can position Tenaga further with respect to the energy transition for the country as well as for the region. So I'm pleased to share some of our performance highlights for the first 9 months of financial year 2025. The group delivered a strong financial performance, underpinned by the continued stability of our regulated business. We recorded a core profit adjusted for ForEx transaction and MFRS 16 of MYR 3.26 billion compared to MYR 2.87 billion in the corresponding 9 months last year. So this is a reflection of our underlying strength of our core business. So what we have seen to date is stronger performance across all the 4 business pillars that we have. It's driven by all the improvements across those 4 business pillars. The first, under the Deliver Clean Generation, Genco overall performance improved with higher core PAT of MYR 238.9 million compared to MYR 175.8 million in the previous year. This is supported by a strong operational efficiencies as reflected by an improved equivalent capability factor or known as EAF of 86.9%. And as everybody could remember, Manjung 4 is fully operational since the beginning of the year. Second, under the developing energy transition network plan, we deployed MYR 38.3 billion of regulated CapEx, comprises of MYR 7.6 billion in base CapEx and additional MYR 0.7 billion in contingent CapEx. This intensified investment demonstrates steady progress in delivering our RP4 commitment, especially in grid investment to ensure reliability of the supply and to deliver those projects that related to the demand growth for the country. So under dynamic energy solution, happy to share that we are making good progress with respect to the electrification of transport in the EV space, where we see, to date, we have 5,000 -- more than 5,000 EV touch point in the ecosystem, contributing to about MYR 5 million in revenue. Within this ecosystem, Tenaga Nasional, through our Electron brands, installed new 94 TNB charge point during the quarter, bringing the total to 160 TNB charge point in our EV network. This is to reinforcing our commitment to support the country growing EV infrastructure. So this is where we see a good momentum and progress with respect to the electrification of transport, especially to the master transport. In this case, the cars instead of the heavy vehicle. And lastly, under our driving regulatory version, the transition from the ICPT to AFA mechanism effective 1st July 2025, amongst significant structural improvement, the AFA mechanism enabled immediate cost recovery compared to the previous [ segment legs ] in the previous [ SCPT ] regime. This helps improve TNB cash flow at least by 2% and definitely enhanced our planning with respect to the working capital. So overall, these results reflect our resilience, operationalized discipline and continued progress in advancing the energy transition while delivering sustainable value to all the stakeholders. Moving on to our generation growth outlook. Momentum remains strong, supported by government national capacity plan. Recently, we received a letter of notification for technical and commercial term covering a total capacity expansion of 1,262 megawatts across 3 power stations that are owned by Tenaga Nasional, namely Gelugor, Putrajaya and Tuanku Ja'afar. This -- if [indiscernible] is part of the so-called RFP that's being put forward by the government under Category 1, where the government request for proposal with respect to the extension of the power plant. So we are glad that we have gotten the results, and this extension strengthen system liability and ensure that we remain well positioned to support the Malaysian growing demand as well as to ensure that the capacity and the revenue that is coming from this concession will continue -- will continue to be part of TNB revenue in the future. On the second category, the new generation capacity request for proposal, we are awaiting the regulatory decision, which focus on the new gen set capacity, and TNB, of course, participate in the RFP. And we hope that we can get the outcome results before the end of the year. So in short, this national capacity plans, both extension as well as the new generation capacity, provide a strong visibility and reinforce favorable outlook for TNB generation growth in the pipeline for the future. At the same time, let me update some of the progress that we are making with respect to the project that we are undertaking at the moment. On the domestic front, the project execution across our clean generation portfolio continues to progress well and firmly on track. The first one is the Nenggiri hydro project. We have now reached 53% completion, and we remain on track to meet the COD target by the mid-second quarter of 2027. Happy to share that major civil works, including roller competitor concrete, RCC for the saddle dam already underway. The second project that we are currently undertaking is the Sungai Perak Hydro Life Extension Programme has achieved 23% overall progress. Data collection for all the units has been completed, and this is a rehab project. And the project is on track to deliver the first unit at Chenderoh position by the first quarter 2026. At Kenyir, the plan for the hybrid hydro floating solar project has reached 70% predevelopment progress, and the commercial evolution is currently in the final stage. So this is another opportunity for Tenaga to provide the clean generation to the customers directly through the CRESS program. On the land solar projects that we are undertaking under the Corporate Green Power Programme, or known as CGPP, all 3 sites continue to progress well with more than 85% completion and remain on track to achieve COD. The second project, the -- for the land solar is the awarded large-scale solar 5 tender is progressing towards achieving financial close by early 2026. At the same time, we're also taking a project into Sabah together with SESB, which is our majority owned subsidiary. And it's also to expect -- we also expect to have the project closed by the end of this year 2025. And lastly, the Battery Energy Storage System at Laha Datu Sabah, in which our subsidiary, RE, are taking together with SESB, has successfully achieved COD in August 2025, and it is in full operation test now. And it is -- it did have the so-called -- provide the energy to the eastern part of Sabah. Overall, we have 1.2 gig currently under construction, reinforcing our clean generation growth platform that we currently have. On the international front, the third quarter update progress in the United Kingdom. We have achieved our international RE portfolio recorded important milestones this quarter. In the United Kingdom, our greenfield solar project, both Eastfield at 35-megawatt peak and Bunkers Hill, about 67-megawatt peak, have achieved COD in July 2025, contributing a combined of 102-megawatt peak of new solar capacity to our portfolio and has started generating revenue for us. Over in Australia, momentum is actually encouraging. As part of the 1 gigawatt Dinawan Energy Hub, the 357-megawatt Dinawan wind farm Stage 1 has successfully secured support under the capacity investment scheme in Australia. This provides a long-term revenue assurance for the project and enhance overall cash stability for the future. The second project that we are undertaking in solar, it is named Wattle Creek solar project, totaling 265 megawatts of solar capacity and 300 megawatt of battery storage. We have executed the connection process agreement with the Transgrid, which is the transmission operator in Australia. This allows us to move forward with detailed grid impact studies of the connection and the best possible discussion with respect to COD. In parallel, procurement for the stand-alone BESS is also ongoing. Meanwhile, for the Mallee wind farm project, 400-megawatt Mallee wind farm, we are progressing connection planning outside that is netted RE zone and have secured the required land easement for the transmission connection, a key enabler for the next development phase. As you can see that the Australian project with respect to the regulatory requirement, one of the key element is actually to get access to the connectivity to the grid. So many of our projects are now at that so-called predevelopment stage securing the grid assets. And we believe that we are making good progress with respect to those in conjunction with cooperation with the local transmission operator. So with this addition, our group secured RE energy capacity now stands at 13.4 gigawatt, of which 4.6 gigawatt is already in operation, while 1.2 gigawatt is under construction, as I summarize the above, and 3.6 gigawatt in the pipeline stage. This continued growth reinforce the position as a meaningful regional RE player while providing diversified income stream over the long term. Next, we move to investment into the grid. And our second strategic pillar, develop energy transition network. We are on track to deliver our regulatory targets, having successfully utilize MYR 8.3 billion of regulated transmission and distribution CapEx. So we invest MYR 3.8 billion to maintain security supply, MYR 3.8 billion to support demand growth, and MYR 0.7 billion CapEx for energy transition projects, enhancing the grid readiness for higher RE penetration and greater [indiscernible] generation embedded to make it a smart grid. Progress of key project. Firstly, the water demand growth, especially data center connection. We have invested around MYR 1 billion while we are also developing the 400 kV overhead land between [indiscernible] and [ Lunga ] project at approximately MYR 0.3 billion to strengthen the backbone of the national grid. Our 100-megawatt -- 400-megawatt hour Battery Energy Storage System pilot project at Santong continues to progress, reaching 56% of overall completion. So we remain on track to achieve the targeted completion by December 2026. Meanwhile, at the distribution space for smart meter, we have over delivered our -- for the year 2025 full year 360,000 unit target with around more than 500,000 units installed at the end of the third quarter 2025, bringing the total 5.1 million units into the system, which is about 45% of our customers. This is also reflecting our strong momentum in empowering the customer energy management, including the new tariff offering of ToU. So this is one of the, I would say, the intended outcome of the smart meter, providing the customer with the energy management system and supported by the tariff structure of ToU. For distribution of the material, which is important for our supply reliability, we have installed the system in 2,490 substation at the end of third quarter 2025. And as of October 2025, we have achieved 75% of our 2025 target of 4,026 substations. So the projects under the CapEx, both for transmission and distribution are well on track. While our domestic investments ensure the grid is ready for rising demand as well as RE penetration, the net emission of our strategy is regional integration. Under the ASEAN Power Grid, we are actively developing interconnections that will position measure as a key hub for clean electricity exchange across the region. Currently, we have about 1.4 gigawatt of existing interconnection capacity with Singapore and Thailand. Looking ahead, we have 5 potential pipelines, interconnection projects, enabling the transmission of our 6 gigawatt of combined RE energy, including hydro, solar as well as wind with Vietnam, Singapore, Thailand, Sabah and Indonesia. This project will serve as enablers for the original energy transition and position Malaysia a central hub for cleaner energy flows. On the business plan, we believe this is the foray of Tenaga to have part of the so-called regional market in our revenue. And hopefully, we can expand the third pillar in combination of the domestic and international business. Now we have the opportunity to include the regional business as part of the mainstream of Tenaga revenue. Moving to our third strategic pillar, Dynamic Energy Solution. We see that electricity demand has continued to grow. For the third quarter 2025, the total units sold reached more than 99,000 gigawatt hour, reflecting sustained demand momentum. This growth was largely underpinned by the commercial sector, which account 70% of the total units sold. For the commercial demand, we see that the growth year-on-year is about 7.7%, led by 3 subsectors: Data centers, of course, contributing 5.2%; followed by the malls business and accommodation services at 2.2%; and the rest of the commercial sector adding another 0.3%. So we see a strong growth with respect to the commercial sector as well as our domestic sector. In terms of the sale contributions, mall business and accommodation services made up 80%, other subsectors contribute 60% while data centers account for 30% of the total units sold in 2025. So what does it mean is that, yes, we can see that data center is growing. But in the overall scheme of the subset so-called unit, now it contribute about 3%. We still have the majority of the commercial from the mall and business and accommodation services, adding up by the education and also the communication sector. So we are happy that, overall, we have a good subsectors growth, not only in data centers, but the other remaining business in the commercial sector. For data center itself, we continue to anchor the structural demand growth. As for the end of the third quarter, we have 29 projects in the system with a total maximum demand of 3.8 megawatts. Looking ahead, our secure pipeline now stands at 49 projects, representing 7.1 gigawatt total maximum demand in the system, underscoring the share role as the digital investment hub. Alongside this robust demand growth, we're also seeing positive momentum across our customer-focused energy transition initiative. Under the EV ecosystem, we continue to advance our EV charging rollout with 160 cumulative charge point installed, including 94 in the third quarter 2025. So we remain on track to exit our TNB own targets of 250 charge point installed by the year-end of 2025, supporting the government EV road map and of course, expanding the charging facilities nationwide. Year-to-date, our EV charging ecosystem has generated about MYR 5 million in revenue, of which MYR 1.7 million has come from our own TNB charge point. This reflects steady adoption of our charging solutions and validates the growing demand for EV infrastructure. For the EV charging development, we have introduced the Green Lane supply initiative. And for this initiative, we have completed around 7 megawatt of connections with a target to achieve around 8 megawatt connection within this year. Interest continued to grow strongly. We currently have 448 applications in pre-consultation, representing 130 megawatt of potential new connection as we move forward. Moving on to the solar rooftop through the Spark. Uptake remains steady since [ inception ] in [ 2029 ]. We have secured more than 3,000 projects representing 538 megawatt peak of secure capacity. As of September 2025, we have installed a total of almost 200-megawatt peak, generating approximately MYR 80 million in revenue for the first 9 months of this year. We are seeing a strong participation from key segments -- key customer segments such as manufacturing, government as well as from the construction center. On energy efficiency, myTNB app currently adopted by 8 million of our customer base, which represents 80% of the current 10 million customers that we're having. Over 2.5 million users have now subscribed to myTNB Energy Budget feature, helping save 100-gigawatt hour of energy. And at the same time, if we calculate in terms of the carbon emission, we perhaps avoid more than 75,000 tonnes of carbon emission as of September 2025. Additionally, as I mentioned, the update for the time of the scheme has been very encouraging with about 52,000 customers now optimizing their consumption pattern to better manage the electricity costs. This initiative reflects our progress in driving customer participation in the energy transition and unlocking growth from the consumer segment of our customers. So that is the overall 4 pillars performance as of the third quarter. Now I will pass to our CFO, Encik Badrul, to provide a little update on the third quarter financial performance, please.
Badrulhisyam bin Fauzi: Thank you, Datuk, and good morning, everyone. Good to see all of you here in Unit 1 today. And since the results last Friday, seems like you guys have been doing a lot of work over the weekend. So good to see you here. So I'm pleased to report that for our 9 months performance, you've seen that we have a stronger financial performance, which mainly still driven by regulatory business. And obviously, you will see as well a result of more effective capital management. So for the first 9 months of 2025, our revenue, EBITDA, PAT across the board have showed positive year-on-year growth. So as of 9 months 2025, our revenue actually increased by 18.3% compared to previous year. And you'll notice that this is mainly driven by higher electricity sales. It's important to note that implementation of cost reflective of before-approved tariffs continue to support revenue as well as affirming that we will continue to support the stability of our regulated business. On the EBITDA side, you see improvement as well, supported by higher revenue, recording an increase of 4.8% year-on-year, increasing to MYR 15,088.2 million. EBITDA margin, as well, you'll notice that strengthened to 31.2%, showing improved efficiency across the group. So I think this is important to note that as we monitor the EBITDA margin, this shows continued progress of the company, where a lot of cost management has been put in place to ensure our stable operation, continue to deliver the regulated profit. So at PAT level, you will notice that our profit grew mainly because of the improvement in the operational performance of the company. So you'll notice that we are now focusing on core profit after adjusting for ForEx translation MFRS 16, which is a much better reflection of the performance of the company. So that figures now is at MYR 3.259 billion, which is an increase of 13.7% year-on-year compared to the same period last year of MYR 2,867.4 million. So I think based on that number, we would like to conclude that as far as the overall performance is concerned, lower net finance costs as well as ForEx movement actually provided an additional uplift to the performance of the company. But most importantly, cooperations remain the main driver of the performance of the company. So for FY 2025, we believe that the group remains on track, supported by resilient operations as well as prudent financial management. This is -- we'll make sure that we continue a sustainable performance for the full year this year. You will notice as well that as far as the group earnings are concerned, we have actually supported by 2 important pillars that continue to support our operation, importantly, improved generation performance as well as sustained world-class network performance. So this is important. As you noticed that the network reliability across transmission and distribution continue to deliver our earnings. So as far as generation is concerned, the higher equivalent availability factor of 86.9% in 9 months this year is much higher compared to 80% that we achieved same period last year. So the improvement actually reflects stronger overall plant performance and the fact that our maintenance and repair all are delivering the expected performance from the plan. So this is something that a lot of focus is being put across, and we continue to maintain this high availability as well as operational excellence across our plan for this year and many more years to come. For system minutes for transmission, 9 months is actually -- 9 months this year is actually at 0.0695 minutes, which is as reported quarter in and out every quarter, well below our internal threshold of 1.5 minutes. This is important because as you noticed, a core part of our revenue and profit come from this. And this continues to underscore our commitment to make sure that our regulated business continued to perform and deliver the baseline revenue and profit. This will only make sure that we have a highly reliable and stable earnings as a result of stable transmission network. So for SAIDI distribution minutes, you notice that the numbers for this year improved to 34.99 minutes compared to 35.72 minutes in 9 months 2024. So I think this is, again, every quarter, we would like to emphasize this because this is an assurance to all of you that stability of our regulated business ensures that we've got better services to our consumers and continue to deliver the earnings of the group. So if we move to a bit more financial metrics that we are collecting, you will notice that we have a stable collection trend, and regulatory certainty continue to underpin our very resilient cash flow. So if you look at our trade receivables and collection, trade receivables remained stable. It has been around MYR 4.4 billion to MYR 4.7 billion year-to-date and continue to be stable. This actually also a reflection of stable collection trend with average collection period, which continue to be below 70 days. So this has been at around 27, 28 days. So very healthy numbers despite the jump on the revenue, which has grown significantly by 18%. So you will notice as well as far as the AFA mechanism, which has gone into effect as of 1st July 2025, this actually enabled us to recover immediately all our generation cost because it is based on forward-looking forecast every month. So this has also helped us in the sense that coal price has now stabilized at around USD 90 per tonne this year compared to much higher USD 121 per tonne as of September last year. So we believe that the fact that fuel prices are stabilizing, we have a strong collection trend, and it is being helped further by the newly implemented AFA mechanism, which will only continue to strengthen our working capital as well as provide us a much healthier cash flow position. So in short, I think this is what you're going to see. We have put a lot more focus in our capital management, which is actually giving us the right result on the pretax of stabilizing fuel prices strong collection. And this will continue to make sure that we have the liquidity and the strength to make sure that we have the financial resilience for us to continue investing. So this trend that you're seeing today actually will show that we have a strong foundation, enabling us to weather the market condition and most importantly, enable us to continue our long-term investment plan to make sure that we deliver the energy transition agenda. So if we go into more detail as far as the outcome during the quarter, you will have heard that we've got 2 reports came out from both S&P and Moody's. So both international rating agencies actually have reaffirmed their ratings of the company with stable outlook. This is something that is very important, like I said, because you have noticed that we have been investing a lot this year, and we will continue to invest in '26 and '27 as well. So S&P Global Rating maintained the rating of A-, and Moody's continue the rating of A3. But I think most importantly, probably this one, some of us, since most of you are equity analysts, you probably don't dive into the detail as far as the credit rating is concerned, but I think we would like to highlight that for S&P Global Ratings, as a matter of fact, yes, we continue to be rated A-, but they have a component where they have a stand-alone credit rating profile of Tenaga as well. So that rating before this was BBB. So now that has been upgraded to BBB+. So before this is standalone BBB, but we've got 2 notch rating upgrade to A- to reflect the sovereign rating. But now, on our own, we have already been upgraded to BBB+. So we are only upgraded 1 notch, reflecting the sovereign nature of the country. So this is affirmation that as far as S&P Global Ratings is concerned, we believe that our cash flow is going to be a lot more resilient going forward, supported by 2 things. The first one is the AFA mechanism because this will actually stabilize our cash flow and receivable with immediate recovery of generation costs, and they have been tracking our performance in terms of the lease liability, especially the PPAs, and now they are comforted that the overall regulation formulation for PPA enabled us to recover all the costs under the power purchase agreement with the IPPs. So with those 2 adjustments to the cash flow forecast of the company, they believe that the cash flow strength of the company will be only be better going forward. Moody's rating, they continue to reaffirm the A3 rating. Obviously, the normal assessment covers the fact that we have a very supportive regulatory regime and tariff reform that has been implemented by government that enhances the revenue visibility and cash flow efficiency. So obviously, when we talk about the credit rating, usually, we'll take it as a blended more indicative ratio of gearing ratios. But I think it's important to note that as far as both Moody's and S&P are concerned, they are actually monitoring a different cash flow profile. So just to give you some perspective, S&P, in particular, they monitor funds from operation as a level of debt. And Moody's, they monitor retained cash flow as a percentage of debt. So yes, I know a lot of you guys are monitoring our overall gearing ratio in particular. But for credit rating purposes, they actually dive into more detail to make sure that the cash flows are supported by operational cash flow coming forward, especially in an environment where you continue to invest. So I think what we are putting across today is the fact that we believe that, in summary, this recent upgrade reaffirmation continue to underscore the strength of our credit profile as well as our long-term financial outlook. So we always would like to point that as far as S&P, in particular, this reflects increasing confidence in the robustness of our fundamentals as well as the fact that we have a stronger cash flow stability and visibility with minimal risk. Altogether, this development reinforces our financial resilience and validate our disciplined approach to financial planning in managing our balance sheet so that we continue to enable our long-term business plan. So I think we are very clear, as far as we are concerned, yes, we are pushing for growth, and we will continue to support Tenaga's energy transition and creating continuous value for our stakeholders. With that, I'll pass back to Datuk Megat to cover the outlook for the year.
Megat Bin Megat Hassan: Thank you very much, CFO, on the financial performance update. So looking forward, the forward guidance, especially for the next quarter. We anticipate the electricity growth to grow in line with the IBR projection of 2.8% for the year. This reflects the overall growing economy, particularly from the commercial sector. In terms of our group CapEx, which we probably have more say in it compared to the so-called demand, we plan to invest a total of around MYR 15 billion this year with the estimated or projected MYR 12 billion allocated to the regulated business and another MYR 3 billion on the nonregulated business. So our investment remain aligned with the national priorities, centering the grid, supporting demand growth, [indiscernible] Malaysia energy transition as well as to ensure that the capacity of generation is good for the country. By year end, we expect to strengthen our RE portfolio with an additional of 212-megawatt peak of capacity, taking into account the commissioning of our 102-megawatt peak U.K. solar assets. And they are coming COD of our CGPP projects of 110-megawatt peak. On the capital management, as mentioned, we remained fully committed to executing our CapEx efficiently while maintaining a healthy cash position supported by a prudent working capital management. To our shareholders, we reaffirm our commitment to honor our dividend policy and strive to provide sustainable dividend in the future. Ultimately, our focus is on ensuring long-term sustainable growth, advance Malaysia energy transition agenda under NETR, and this is reflecting -- reflected through our future investment that we are committed to deliver. So we will continue to position TNB as a leading provider of sustainable and reliable energy solution, creating value for our customers, commodities, shareholders as well as the nation. So with that, thank you very much for the listening.
Unknown Executive: Thank you, Datuk Megat and Mr. Badrul, for your presentations. I would like to inform that we have 90 people joining us on Webex. And let us now transition to the Q&A session. We will begin by taking questions from the attendees here in the room, followed by those joining us on Webex. With that, I open the floor for questions. Please feel free to raise your hand, and our staff will pass the microphone to you, and you may proceed to ask your questions. Kindly introduce yourself and share your questions. Thank you.
Dharmini Thuraisingam: I have 3 questions. My first -- this is Dharmini from CGS. My first question is clearly on the taxes. There was the announcement in the Bursa saying that you have been allowed investment allowances. Can we get a bit more clarity as to how much of the MYR 10.5 billion can be clawed back over how many years? And how does that impact your effective tax rate moving forward? The second question is, can we get an update on contingent CapEx? We are now 1 year into RP4. What's visibility like? Are we still looking at 70% utilization for RP4? And has there been any resolution on the remuneration mechanism for contingent CapEx? And just a final question on data centers. I think the Deputy Minister highlighted there are some concerns on take-up. How should we as analysts as well as investors be reading this? Should we be concerned firstly from a Tenaga's perspective? And secondly, generally in terms of data center demand in Malaysia?
Megat Bin Megat Hassan: Okay. Thank you very much for the 3 loaded questions to begin with. So on the tax allowance, everyone understand, this is a tax matter that has been in the system for many years. That is a question of the reinvestment allowance. So for Tenaga perspective, we are glad that the Federal Court has made a decision with respect to the clarity on the investment allowance bucket. And as guided by the Federal Court decision, we have submitted the so-called reinvestment allowance claims under 7B. So recently, we have received the so-called decision on the reinvestment allowance. So at this very moment, we are still looking at the so-called calculations of the so-called reinvestment allowable allowance. And definitely, we'll provide the feedback as soon as we get better clarity in terms of the details of the allowable reinvestment allowance. So on one aspect, we are happy that the company can move forward with respect to our performance. And as reflected today, the third quarter performance or the current performance of Tenaga basically not affected by distribution that we have on the reinvestment allowance. Anything you want to add?
Badrulhisyam bin Fauzi: I think that you covered everything already. That should be okay. It's a delicate subject.
Megat Bin Megat Hassan: The contingent CapEx, 70% utilization is still on track. So if you look at the 3-year period, definitely, we are looking at a high percent of the so-called contingent CapEx. If you look at the scheme of things with respect to the base and contingent CapEx, it is only expected that Tenaga will use the so-called the base CapEx, first, comparatively to the contingent CapEx. Even notwithstanding that, we are going to -- we already utilized the contingent capacity in the first months of this year because in -- against the way the contingent CapEx such as it's based on the triggering of CapEx required for a certain category of demand. So if you ask me today, yes, I think we are very much confident that we can't utilize the CapEx. And one of the CapEx that has been being tasked for us to utilize is actually the contingent CapEx with respect to the smart meters installations. That's why you can see from the report just now, we have achieved more than we are targeted. But then again, that is probably for the year. But then again, that is not the actual target because the actual target now has moved from 360,000 to complete the whole smart meter installation by this period. So looking at that, definitely, the smart meter triggering has happened, and we have start utilized it even though in the first year of the utilization. And if you look from the history of Tenaga, we have always, in the last RP able to complete and deliver those CapEx. And we intend to do the same for this CapEx allocation that we have for this year as well as the next last 2 years. On the third question, data center underutilized demand should be a concern. I think from Tenaga Nasional perspective, we are actually aware from day 1 that data center demand is going to be a step demand, meaning that every month, there would be a demand increase. So it is not linear or something that you can expect from the form other of demand growth. So from Tenaga, we feel that looking at the demand growth, it is very much a step push on a monthly basis, and our retail team is monitoring that. And that's why in terms of the generation capacity, I think there are a lot of questions in the past, but can the generation capacity cater for it? I think that question arise because when you look at the demand projected being asked by the center, they always put the end demand in mind so that we can prepare in terms of the planning. For example, they will ask in the supply applications and that we won a 100-megawatt data center. But within those so-called projection, we actually discussed and have a good, I will say, a view with respect to the demand growth within that 100 megawatt, which is a step demand. So that's why we are -- in terms of the generation capacity, yes, we mentioned now the 7.1 gigawatt of capacity request. So if you add mathematically our generation and the demand that we have, it may be a concern to many, many people. But if you look at the growth, the 7.1 gigawatt is required by a certain year. It is not today. So that's why Tenaga is confident that we can meet the demand. That's why we actually process it, the demand, and that is our advice to the government as well. So looking at that growth, I think we are seeing a steady growth of data center, which is part of their planning because the way data center operate as well that they actually operate in a modular basis, meaning that they can install the so-called CPU or GPU in a modular form based on the so-called client requirement. So we -- if you ask me, we are positive on this, looking at the phase monthly demand growth, it is there. And it also provide us Tenaga Nasional as an infrastructure company. The time to build this so-called generation as well our transmission and distribution asset. So we cannot ask for more from the perspective of utility. A good demand with respect to the so-called scheme. And the scale is not too demanding on our infrastructure because we are given the time to actually plan and deliver it. So I think that is my summary with respect to data centers. And in the past, I think we have so-called invite the analysts to visit some of data centers. And we are also willing to do that if you feel that is necessary to get the assurance from the data center's players themselves because we are having a good communication with them and we know what they are up to in that sense. And they're also always giving us the so-called heads-up respect what they require in the coming months. Thank you.
Unknown Executive: Thank you, Datuk. So I open the floor for the next question.
Unknown Analyst: A couple of questions from me. Firstly, congrats on the extension of 3 power plants under the -- this RFP. Can you help us understand in terms of the implications for Genco's earnings, right, from this extension, would it help Genco's earnings to grow? Or would it only just help Genco's earnings to sustain at current levels? That's the question on the extension. And also with regards to the new generation capacity, can you help us understand whether there is a limit on the number of new plants that a bidder can win in this RFP? So that's question number one. Second question is with regards to your bad debt provision. So I think in this quarter, there was a receivable that was reclassified into a bad debt, around MYR 260 million. Can you give us a bit more color as to whether this is truly a bad debt? Or is it just a case of the receivable having aged and you having to provide for it and collections are still underway? And is there more potential to come from this debt or this receivable? Yes, those are my 2 questions. Sorry, I'm [ Fong ] from CIMB.
Megat Bin Megat Hassan: Okay. Thank you very much for the questions -- 3 questions. I take the good one. The bad one, I will leave to the -- because of the bad debt. So I'll leave it -- anything bad debt, I will give to the CFO. So the first one is actually implication for Genco with respect to the extension. As you can see, the PPAs of the power plants, normally, there is a 2-tier pricing mechanism. There is a period where we earn based on the first tier tariff. And then the second tier, normally there is a second tariff. So with the extension, basically, that will have a reset meaning that we will move to the -- we will move back to the so-called first tier. So it provides us both the sustainability as well as the potential upside with respect to the revenue for Genco. So that's why we are quite excited. Of course, it is dependent on our performance, but there's a potential for us to go for the upside because it becomes a reset with respect to the recession. I think the second question, new generation capacity, is there any limit for the bidder can win? I think in the RFP document, I think it is a public document. That is a megawatt -- a range of megawatts specified for the new generation capacity. If I remember correctly, it is about 5,400 to 5,000 megawatts. So that is the capacity the country is looking at. So that's where the bids come about. So I don't think there is any limit for the bid, but the limit is more -- if we can say there's a limit, I don't think is a limit, it is what the industry requires, it's about 5,000 megawatt. So for Tenaga Nasional, we -- as an incumbent, we feel that we have a good chance. Thank you.
Badrulhisyam bin Fauzi: On the second question, it's not bad, actually. Actually, this is -- I think it's really our more proactive approach to make sure that we comply with the provision in terms of what has to be impacted and all. But in this particular one, you are right, actually, it's more of accounting treatment, and this is actually an effort in the way that reflect it true nature. And no, we're not giving up. The collection is actually being underway. So is this just trying to make sure that we follow the accounting standard. But obviously, we are working with specific debtors to make sure that we continue to recover what is due to us. That's where you can see that to us, yes, this is specific instances. But more importantly, that's why you look at the collections receivable as well as the SEP that continue to be in there. So that's why the collections continue to be strong for us.
Megat Bin Megat Hassan: Just to add, I think that is the prudent practice that TNB has been doing in the past as well. While we continue to collect and there are various means, including the last resort is, of course, collection through legal. But before that, there are 2 other steps that we are taking to ensure that we get the so-called collection that is due to us. So anything that we collect has now become an upside. That's how I see it. So it is probably a good debt provision rather than a bad debt provision. I'm not in [ content ], so I can't change anything.
Unknown Executive: Thank you, Mr. Badrul and Datuk. Maybe we can have another question from the floor?
Chee Chow: This is Isaac for Affin Hwang. This is a follow-up question actually on the former question. I mean it comes to the RFP category one, can we just have some more clarity on when having started and how long is the extension, whether it's optional plus 1, plus 1 or how does it work? And number two is that when it comes to the category 2 is your Paka Repowering project and maybe the Kapar power that and have you secured all the gas turbine and whatnot?
Megat Bin Megat Hassan: Yes. So on the so-called RFP category 1, there are -- the extension for the 3 power plants, there are various date with respect to the start of the extension. What is important is that the extensions will come with the work that for us to ensure the continuity and reliability of the system, we will have to do the so-called rehab on the plant, meaning that we will do a good check with respect to the performance -- the current performance because it is already basically ending of the PPA. So we are going to start doing those planning to do those -- what are the required with respect to ensure that the power plant will continue for the next 5 years of the extension. But the COD will start around 2028 to 2029, and it is different from each power plant. And in the meantime, the power plant will operate based on the current PPAs. On the second repowering and Kapar secured gas turbine current status. For Paka one, yes, we have had a conversation with the manufacturers and in particular, 1 manufacturer. We believe we have secured the gas turbine for the project.
Unknown Executive: Thank you, Datuk. Maybe we can have another question from the floor before we move to the Webex. Is there any question from the floor? All right. So now we will now proceed to take questions from the analysts who are joining us virtually. [Operator Instructions] So we have first question from Iwani Farzana from PNB. We have unmuted you. Kindly proceed your questions. I think we will proceed first to Rachael Tan from UBS. [Operator Instructions]
Rachael Tan: Can you hear me?
Unknown Executive: Yes, we can hear you.
Rachael Tan: Okay. So I have 2 questions. So the first is on the news flow that you've lost in excess of MYR 5 billion from electricity debt. How does this impact earnings? And is this accounted for in the regulatory -- under the regulated business model? Second question is that your gearing ratio looks a bit low for a regulated business. Since RP4 documents are not out yet, could I check what the target gearing ratio is for the regulated business? And does this affect your returns? Or would you just get 2.7%, 2.8% regardless of the gearing level?
Megat Bin Megat Hassan: Okay. Thank you very much, Rachael. On the first question, with respect to the so-called loss on the electricity debt. I think we have the figures being quoted for a number of years. So with respect to the so-called TNB perspective, of course, we have formed a task force with respect to theft of electricity, especially handling the Bitcoins segment that has caused the losses to be much bigger than comparatively. So the task force is working together with the regulator, Energy Commission and also the Ministry, how best we combat this so-called theft of electricity that is happening currently. And those figures that you have seen is actually part and parcel on the task force work that the figures that we have identified and some of those figures, we actually have recovered the losses. So there are 2 perspective, yes, figures identified. And the other one is actually that is part of the task force work that we have recovered some of those theft of electricity. So with respect to the whole industry perspective, the -- as far as the regulatory business, this is actually an industry loss because at the end of the day, the losses is calculated as part of the tariff calculation. So it is actually, if I may use the word, essentially being socialized to the whole industry. This is where we want to also to encourage the customers, the one that is not basically involved in this is actually affected because it is, from the industry point of view, it is being socialized. So in that sense, TNB will continue to be aggressive with respect to theft of electricity. But at the same time, we want also the public to help us actually report all these cases because the industry is actually at a loss rather than the TNB from the perspective for the company itself. So that is a theft of electricity. The second question, I leave it to our CFO.
Badrulhisyam bin Fauzi: Thanks, Rachael. I am pleased when people say they think our gearing is relatively low because that's the way we should think about it because today, as for our gearing level, that's around 52.4%. And you will make references to the regulated industries guideline. So under the rate for our regulated business, the overall framework actually allows for 55% gearing ratio. So we believe that this is -- there is still some room for us to actually push the gearing ratio to make optimum use of our capital allocations. And like I said, yes, for a regulated business that's important. But of course, we are very aware that we've got to safeguard our credit rating profiles as well, which, as mentioned earlier, does not tie to specific gearing ratio, but rather the cash flow position of the company as a percentage of debt numbers. So we are focusing on this, and you will see, hopefully, we'll be able to optimize our capital allocation as well as gearing level for both regulated and unregulated so that we can optimize the return to the shareholders. Thank you.
Unknown Executive: Thank you, Datuk and Mr. Badrul. So we have another question from Eliza Tay from Fidelity. So we have 3 questions here. The first question for new gas generation capacity to be announced in 2025, when will potential plan start up? And the second question is what was the power demand in megawatt from data center in 3Q 2025? And the third question will be what was the power demand in megawatt from data center in 3Q '25?
Megat Bin Megat Hassan: Thank you, Eliza Tay, on the questions. The first one, for the new gas generation capacity to be announced end of 2025, when will potential plan a set up? So based on the request for proposal, there is time line given or date given for the COD. So it is going to be end by 2028. So as far as the industry and the regulator is concerned, this is where the expectation of the new generation capacity to be taken place, so which is about 4 years from now. So this is also in line with the so-called required construction time of a new power plant between 36 to 42 months. So that is the date as far as the new generation capacity is concerned. With respect to the power demand of data centers, yes, for -- we gave some numbers with respect to the demand to show that there is a growth. So in June '25, it was 603 megawatts. In September, end of the quarter, 701 megawatt. And I believe in October, it's already 850 megawatt. So that is the growth that we are seeing. So it is on a monthly basis. I think we approach the industry think in this is a small number. This is not an -- 100 megawatt is a big number. Our generation capacity, for example, one of the hydro generation capacity, Chenderoh, for example, is 50 megawatts. So it's a big number. It is not kilowatt. It is megawatt. It's big in numbers. And probably, if you ask me, I've been in the industry for many, many years. And we always see this kind of growth go in early '90s, where we do the so-called FDI that is coming in with respect to the manufacturing industry from the overseas market, making the Malaysia as the best investment hub. And this is actually big. It is not a kilowatt. We are seeing a growth of 100 megawatts a month. So I think probably that is where electrical engineers like me appreciate it, but I think it is a big number with respect to the infrastructure that is required. And of course, it is a big number with respect to the sales that we are projecting. Thank you.
Unknown Executive: Thank you, Datuk. So we have another question from Sumedh Samant from JPMorgan. Can you hear us?
Sumedh Samant: 3 questions. So firstly, just a housekeeping. I saw in the earnings, there was a gain on financial instruments, some MYR 233 million or something. Could you please explain to us what that was? And is that a recurring feature or nonrecurring? My second question is actually, on the financial notes, there was a mention that Tenaga received a letter on 26th November about approval of investment allowances. Can I check if it's for the future or if it's for the past? And perhaps the third question, again, going back to the whole provision, MYR 10.6 billion. Can we check what will be the steps that Tenaga will be taking going forward to potentially reverse this? Or do we think that this is all that we have to pay to the IRB anyway and there won't be any recoupment?
Badrulhisyam bin Fauzi: Maybe I'll take the question on the provision. Yes. So I think, I mean, you all are aware that previously, obviously, we clipped the reinvestment allowance under 7A. And after the Federal Court decision, we reviewed our position, and we submitted a claim under 7B investment allowance. So we disclosed in our announcement that we received a letter from MOF on 26 November. That was for investment allowance. So it is for Schedule 7B and, of course, it's for future income. But the investment allowance for is actually from the perspective of the CapEx previously spent originally claimed. So that's on the approval. But I think most importantly as well, as far as the amount of MYR 10.6 billion previously disclosed in our quarterly results as far as the litigations are concerned, you would notice that in the recent announcement, we have also made a statement that we have withdrawn and concluded all the legal arrangement with the tax authorities for that matter. So all cases has been closed. So for accounting purposes, we actually disclosed as well in our [ PYA ] in Note 29 that as far as the position of the company is concerned, we have actually taken a [ PYA ] adjustment to the balance sheet to retrospectively to actually reflect the actual situation. So the tax cases was actually for prior years leading up to 2024. So it has been reflected as such in the prior year's adjustment to reflect the actual situation. As far as the approval letter, obviously, I think it's still fresh off the oven, and we are actually still assessing the actual impact of the approval together with our auditors. We should be able to hopefully share with you direct implication to our effective tax rate going forward, hopefully, but obviously, we are already in quarter 3 in December already for 2025. So I think as far as the guidance is concerned, for 2025, we probably continue to guide it at the current level. You will see that 9 months, we are at around 29%. Hopefully, however, obviously, going forward, we should be able to have more -- a better lower effective tax rate. So bear with us, it's coming through, but we have to take this properly step by step to make sure that we get the correct treatment.
Unknown Executive: Thank you, Mr. Badrul. So we will be moving on to the Iwani Farzana from PNB. So the first question will be, can we check for Cat 2 project award? The announcement by year-end, will it be only for partial award to certain players or lump sum? And for the second question will be under tax. For ITA, how much actually was approved? Total amount of 50% as guided to foreign investors? And does this approval also guarantee future ITA claim under 7A will be approved? If yes, will be -- will the guidance of approximately 30% tax be revised downwards? Additionally, for the approved ITA 2003 until 2024, since it can be deducted from future taxable income, what will the strategy allow? Lump sum -- or if gradually, can you share over the span of how many quarters or years allow? And the last question will be any update if the contingent CapEx earnings can be recognized in RP4? Or will it be the same case as to what happened in RP3, which means it can only be recognized on P&L in RP5?
Megat Bin Megat Hassan: Thank you very much, Iwani. I think the question on #1, whether the project what will be to certain players or lump sum. I think that is definitely beyond Tenaga Nasional. It is the decision by the Energy Commission. So I would not want to comment or speculate on those. Thank you. And for the second question, maybe for CFO, Badrul.
Badrulhisyam bin Fauzi: Thank you, Iwani. I think just further on to deliberate from what I've mentioned just now. I think we can inform you that it's not the full amount, but it's a fair amount. And I wanted to be clear that I think, Iwani, have in her question that 50% guided to foreign investors that did not come from us. We did not guide anything -- any amount of that approval to anyone. You will understand that all we can say is it's a fair amount, and that's all we can disclose at the moment. And I think what's important is, like I said, we are still assessing the impact. So I will not be able to tell you how long and all. So please bear with us just this time. And I mean to put this into perspective, like the Datuk Magat said, this has been there for the last 20 years. We are finally resolving it. So just give us a bit more time to actually do it properly this time around. So I think that's really all that we can actually inform you at this point of time. Yes. And as mentioned earlier, this is already December. Tax rate for this year will be -- hopefully, we'll be able to manage it a little bit. But in the long term, yes, we do expect the tax rate to go down progressively. But as all of you also would understand that there are -- for big corporates like Tenaga, obviously, there are also nondeductible expenses on our balance sheet, including interest restrictions as well as changes in fair value and accretion of interest under MFRS 139. So to get to 24% simply like that will take a bit more work for us to get to that. But I think we can get that, yes, it will improve over time as we finalize the impact of the approval by MOF. And last question on RP4 contingent CapEx, Datuk?
Megat Bin Megat Hassan: Yes. On the last question on the RP4 CapEx. Definitely, we want the contingent CapEx to be recognized on RP4 because it is a clear definition that there is a contingent CapEx. Base and contingent CapEx is clearly defined in the RP4. And I think, Iwani, I made reference to RP3. I think during RP3 period, I would like to say that the contingent CapEx come after, meaning that in the beginning of RP3, there is no definition of contingent CapEx. So that's why the CapEx after discussion with [indiscernible] comes about in the next RP. And I think that is the reason why when we negotiated RP4, we make sure that there is a structured way with respect to addressing the contingent CapEx. And I think we have gotten that structured way by defining both the base CapEx and the contingent CapEx with the so-called projects on both as well as the amount on both base and contingent CapEx. So in that sense, we want to basically make a better definition on the recovery of the CapEx, and we hope to do so in RP4. Thank you.
Unknown Executive: Thank you, Datuk and Mr. Badrul. So we have another question coming from Daniel from Hong Leong. Daniel, can you hear us? Daniel, I think I have unmuted.
Daniel Wong: Okay. I think my question has been already been answered. Just want to check if Tenaga already adjusted all the accounts prior years for these tax issues. Does that mean that Tenaga has to pay in advance the MYR 10.5 billion first to be able to claim the tax -- I mean, the ITA in the bridge for offset the future income? That's the first question. Second question. For capacity of Tenaga's generation about 13-gigawatt size generation capacity. So based on the reported earnings of Genco, about MYR 260 million, is it considered a normalized earnings? That means that full year could be roughly just a normalized MYR 400 million for this 13-gigawatt-sized capacity? Third question is, I noticed that you guided on the RE for Tenaga, you have another [ 70 gigawatt ] and how -- is -- can I get a breakdown of this [ 70 gigawatt ] of RE? That's all for me.
Megat Bin Megat Hassan: The CFO will take the number one.
Badrulhisyam bin Fauzi: Yes. Daniel, I think as mentioned earlier, I think let's be clear that for the last 20 years, we have claimed under 7A for reinvestment allowance for CapEx previously spent. So when the Federal Court rule for us to claim under 7B, we make the application under 7B for the same CapEx that was spent for the last 20 years. So we talk about the approval just now, yes. So that's why as far as actually the actual tax liabilities are concerned, we can confirm that as far as payment is concerned, yes. As part of the overall application for 7B application, we actually paid all the tax amount that has been assessed to us. So that's why now we've got the approval for investment approval for future income. Obviously, if you're talking about the cash flow, yes, we have paid. And that's why we have actually closed all the legal proceeding with the tax authority. So then, obviously, naturally, again, what is the impact going forward? That one, we are still assessing like I said. But I think it's important to recognize that the overhang in terms of what can happen to us in terms of exposures, in terms of whether it has been settled, that is, finally, we put a closure to it. So meaning there is no more exposure in terms of provision or hit to our P&L as far as the exposure is concerned. So exposure are close, and it reflects the retrospective adjustments to our balance sheet to reflect actually the fact that our retained earning was built up much higher than it was supposed to for the last 20 years. So that's why retrospectively, we adjusted to retain earnings to reflect actually over the last 20 years that would have been the actual earning during the years. That is also in line with the fact that we made the payment for all the tax exposures. So that was the closure to it.
Megat Bin Megat Hassan: Thank you, CFO. So for the tax item, I think what Tenaga has done is actually to comply with the regulation with respect to the payment. I think everybody is aware how the regulation with respect to tax and the payment of tax for the country. And we are actually in compliance with that. On the second question, the Genco earnings projection. I think the figure that we have shown is at the end of third quarter figure of MYR 260 million. We hope that -- of course, the figure can change towards the end of the year. We hope it's going to be a better figure. And the third quarter -- sorry, the third question, RE capacity breakdown of 7.6 gigawatt hour in the pipeline. So we have a number of pipeline gigawatt in our stable. First, in the domestic front. As mentioned, part of the pipeline is the hydro floating solar. We have yet to start construction, but it is in our pipeline. So we are talking about 2,000 to 2,500 megawatts. We have also a pipeline with respect to our investment in the U.K. There are a number of potential bid or even securing the land and also the capacity in the U.K. And we have also the pipeline capacity in Australia. As everyone remember, we -- our investment in Australia, we buy a company that has a right to build RE generation over there. So a combination of Malaysia, Australia as well as U.K. provide those so-called RE pipeline for 7.5, , 7.6 gigawatts for Tenaga Nasional. So meaning that our business part and the foundation for us, taking into account the objective of Tenaga in terms of meeting the ESG commitment that we have for the company as well as for the country.
Unknown Executive: Thank you, Datuk and Mr. Badrul. And we have a question from [ Xi Han ] from FX. Can you hear us?
Unknown Analyst: From APAC Securities. Yes. So actually only 2 questions from me. So I'm going to bore you again with a tax question. So regarding the IA claims right, since we don't know how much is the amount now, but let's say, if -- I mean the amount not approved, right, by Ministry of Finance, will it be straightaway booked as a tax expense in fourth quarter? Or how does it work? So that's the first question. And second question is regarding the operating expense, right? So I just want to know if for the fourth quarter, whether the operating expense will be more or less stable from third quarter because I think there was precedents where the fourth quarter expense went up a lot, could be -- I think it was due to the insurance costs and maybe a bit of repair and maintenance costs. Yes, that's all for me.
Badrulhisyam bin Fauzi: I guess I'll take this one, Datuk. I think, yes, that's why I think it's important to understand that as far as the tax are concerned now, the 7A, 7B, we actually took the position, and this is agreed with our auditor that we have to treat the 2 things separately. So it's important to note that as far as the previous exposures are concerned, irrespective of whether the approval comes or not, those are already put to closure in terms of the right accounting treatment for it. In which case, was that we have incorrectly filed our tax return for the last 20 years. So we have corrected that one through prior year adjustment of MYR 10.6 billion to our retained earnings. So that is to making sure that as far as exposures and liabilities arising from the previous treatment is already put to close. And this is consistent with the fact that we have already paid the tax assessment as well. So meaning it's settled in terms of that. There is no more future exposures or anything. So it's done for that part. So the approval letter that we got from MOF is actually, yes, in respect of the CapEx that we have spent in the past, but it's being approved for us to utilize it as investment allowance. So going forward, when we have our income, we would be able to utilize this allowance to actually improve our effective tax rate going forward. So there is no question about the amount is not approved or anything like this because it is already approved for previous CapEx that we have spent under the form of investment allowance. So now going forward, it will be -- this is what we are assessing in terms of how do we treat the recognition of the investment allowance that was approved by MOF against our future income. So basically, to put it simply, downside has all been settled. Now it's only upside that we are still assessing the impact for Tenaga. So for the second question on OpEx. Most of you have covered Tenaga very long time. So you would know that usually, yes, there is a slight uptick in our quarter 4 OpEx. Lee Lai is already nodding her head, so because she has seen that so many times over the many years. So -- but of course, I think we want to make sure that seasonality is adjusted over time, but at the same time, we wanted to reflect the actual operation as well as nature of the expenditure on the ground. But by nature, however, the fact that all of us human operate on yearly cycles, obviously, quarter 4, we want to make sure that everything is the Is are dotted and the Ts are crossed all our expenditure. Naturally, you should expect slightly higher but nothing unusual. It's just the normal cycle of the reporting of the company.
Megat Bin Megat Hassan: Yes. On question #2, sometimes we also probably have to look from the other lens and that normally in the quarter 4, many things get done because this is where the so-called the KPIs for the company, yes. So you're actually going to see both. The delivery becomes heightened in Q4. And of course, we may require OpEx to be part of the delivery. And it should be also work in tandem. I think that's what we are trying to do. Yes, there could be an increase in the so-called operating expenses, but we have to make sure that it is also coupled with the better delivery in quarter 4. And normally, that's what happens because the cycle of -- yearly cycle of KPIs take effect towards the end of the year.
Unknown Executive: Thank you, Datuk and Mr. Badrul. Due to the time constraints, I think we can have one last question from the floor. Since there is no question from the floor, ladies and gentlemen, at the moment, I believe we have addressed all the questions from the analysts. That is all the time that we have for the Q&A. I would like to thank you for your questions. Now I will pass to Datuk Ir. Megat Jalaluddin Bin Megat Hassan, President and CEO of TNB for his closing remarks.
Megat Bin Megat Hassan: Thank you very much, Azim, ladies and gentlemen, in this room as well as in -- over the online. Thank you very much for the questions. As always, please reach out to our Investor Relations team for any further questions. We hope that we have provided a good answer moving forward for the company. To summarize today's session, the group third quarter performance continue to reflect the stability of our regulated business and the steady momentum from the commercial sector demand, particularly data centers, business services as well as our retail customers. We are also seeing a strong progress across our strategic initiative right to the ASEAN Power Grid Corporation. I think all of you will hear more, especially on the APG next year as we move into the execution mode to strengthen national position as the regional clean energy hub. As we charge forward under the national energy transition road map, we see significant opportunities in RE energy generation, grid modernization and customer-driven energy solution. We remain focused on capturing these opportunities responsibly while supporting national pathway towards net zero 2050. So in conclusion, we reaffirm our commitment to driving sustainable growth and are seeing great readiness and shaping long-term energy transition. With your continued trust and support, we remain confident in our ability to build a stronger, greener and resilient energy future for the nation. Rewarding our shareholders remain a top priority, and we truly value your continued confidence in us. Once again, thank you very much and have a pleasant day ahead. [Foreign Language]
Unknown Executive: Thank you, Datuk Magat. Ladies and gentlemen, we have come to the end of our session. On behalf of Tenaga Nasional Berhad, we thank you for your participation in today's briefing. For any questions that remain unanswered, rest assured that we will promptly address them following this event. If you require further clarification or inquiries, feel free to contact our Investor Relations officers or e-mail us at tenaga_ird@tnb.com.my. To all our attendees whether your present physically or virtually, we appreciate your time and engagement. As you leave the hall, we warmly invite all analysts to help themselves to a light refreshment available at the back. Thank you once again, and we look forward to seeing you in future sessions. Take care and have a wonderful day.