Utility giant Tenaga Nasional Berhad (TNB) said today its third quarter profits were down 31 percent on last year, mainly due to lower foreign exchange gains.

"TNB continues to be challenged with increase in operating expenses that outpace revenue growth," read a statement from the company's Chief Executive Officer Che Khalib Mohamad Noh.

"In particular, volatility in coal prices, increase in equipment costs and rising interest costs are our main concerns," it said.

TNB's net profit for the quarter to May was RM394.5 million, compared with RM572.8 million the year before.

Third quarter sales amounted to RM5.02 billion compared with RM4.84 billion a year ago, while pretax profit fell to RM672.5 million from RM698.3 million.

For the nine months to May, sales stood at RM14.8 billion against RM14.02 billion a year earlier, while net profit surged to RM1.39 billion from RM876.4 million.

Forex gain

The power utility firm said it posted a foreign exchange gain of RM36.7 million for the third quarter, while for the nine months, it registered a forex gain of RM515.7 million.

TNB said it expected the group's fourth-quarter results to improve on the back of a new tariff hike which takes effect this month.

"The tariff review and the continuing growth in the Malaysian economy would result in TNB achieving favourable results for the balance of the financial year," it said in notes accompanying the results.