KUALA LUMPUR (June 20): YTL Power International Bhd shares fell as much as 11.5% in the morning session, following news that Singapore, where the company operates 3.1 gigawatts of licensed power generation capacity, plans to introduce a temporary price cap on electricity prices from July 1.

The counter opened lower on Tuesday (June 20) and fell as much as 15 sen to trade at RM1.15 per share, before rebounding to close at RM1.19, still down 11 sen or 8.46% from Monday’s close of RM1.30.

It was the ninth most actively traded counter on Bursa Malaysia with some 56.34 million shares done.

Meanwhile, YTL Corp Bhd, which owns an effective equity interest of 55.57% in YTL Power, was the third most active counter, down six sen or 6.22% at 90.5 sen apiece, after falling as much as 8.8% earlier.

YTL Power’s power generation business is concentrated in Singapore, which saw spikes in intra-day wholesale power since late 2021 to the benefit of power producers, even as liquefied natural gas prices trended lower this year.

According to the Singapore Energy Market Authority, the temporary price cap, the parameters of which will be in place until a review in the third quarter of 2025, will be tied to generation costs.

Under existing mechanisms, the energy price cap in place stood at S$4,500 (RM15,557) per megawatt-hour. The temporary price cap will see an average reduction in the Uniform Singapore Energy Price (USEP) by 3.6% to 8.1%, according to simulations published in the final determination on the mechanism that was released June 16.

USEP is the half-hourly energy price in the Singapore Wholesale Electricity Market. Energy withdrawal from Singapore’s national grid is settled at the USEP.

Analysts are still assessing the impact of the new price cap model on YTL Power’s earnings moving forward. The group also operates an electricity retail business in Singapore.

For YTL Power, its power generation segment was the main profit driver in the first nine months ended March 31, 2023 (9MFY2023) as other segments turned to losses at pre-tax levels in the period.

In 9MFY2023, it made a net profit of RM891.74 million or 11.01 sen per share, as revenue rose 11.58% to RM14.8 billion from RM13.27 billion in the previous year.

Year-to-date, YTL Power shares are still up 69%.