Malaysia's Tenaga Q3 net profit drops 73 pct

KUALA LUMPUR, July 24 (Reuters) - Malaysia's largest power company, Tenaga Nasional (TENA.KL), said on Thursday its quarterly profits fell 72.6 percent as higher coal prices drove up generation costs.

Tenaga, which generates two-thirds of peninsular Malaysia's electricity needs, earned 298.8 million ringgit ($91.99 million) in the third quarter ended May 31. That compared with a net profit of 1.09 billlion ringgit in the year-ago period.

According to Reuters Estimates, Tenaga was expected to post a 16 percent fall in full-year profit to 3.0 billion ringgit, or 68 sen a share, in fiscal 2008. Analysts in Malaysia do not provide forecasts for quarterly earnings.

Tenaga raised prices by up to 11 percent for most of its customers in June but said this would not be enough to cover higher coal and gas costs.

The company is paying around two-thirds more for its coal this year while the price of natural gas has more than doubled after the government's revamp of energy prices last month.

Tenaga shares fell 22 percent in the three months to May 31, compared with a 6 percent fall in the benchmark index .KLSE. Tenaga shares closed 0.62 percent down at 8.05 ringgit on Thursday before the company released its results. ($1=3.248 Malaysian Ringgit) (Reporting by Soo Ai Peng; Editing by Lincoln Feast)