Earnings of most publicly traded power companies
Nine of the companies saw lower profits while two companies suffered losses and the remaining eight saw higher profits
Profits of listed fuel and power generation companies fell in the January-March period of the current 2021-22 fiscal year due to the closure of some power plants, an increase in the price raw materials and a decrease in investment income.
Profits for a total of 19 companies fell 11.6% year-on-year to Tk 917 crore, according to data compiled by Sandhani Asset Management Company.
Nine of the companies recorded lower profits while two companies suffered losses and the remaining eight recorded higher profits.
Profits fell for some due to the closure of several power plants as their power purchase agreements with the government expired, said Mir Ariful Islam, managing director and CEO of Sandhani Asset Management.
The company is a fund manager that performs analysis on fuel and power companies to make investments.
Although some companies have signed new agreements, their terms are different, he said citing the examples of Summit Power International and Khulna Power Company.
Earnings at Summit Power Internal plunged nearly 30% to Tk 154 crore in the three-month period, according to the company’s financial report.
Earnings fell as there were no operations at three power plants for several months due to expiring power purchase agreements, the company said.
Meanwhile, the government renewed the deals for two years on the condition “no power, no payment”.
Khulna Power Company suffered a loss of Tk 2.21 crore in the third quarter of 2021-2022 while it recorded profits of Tk 41 crore in the same period the previous year, according to the financial report.
Its profits fell mainly due to the closure of business operations at its two factories.
Some of the companies have recorded higher profits for the inclusion of new power plants in their portfolios, Islam said, citing the example of United Power Generation Distribution Company and Shahjibazar Power Company.
Commodity prices have increased for some companies, which has impacted their profits. Some listed energy companies have seen their profits decline due to low income from other investments.
MJL Bangladesh’s profit went down like the cost if its raw materials were greater than its turnover.
Its profits fell to Tk 46 crore in the January-March 2022 quarter from Tk 58 crore in the same period a year earlier, according to the company’s financial report.
Its consolidated revenue rose 21% in the quarter, but its consolidated cost of goods sold rose even more, by 28%, which explains the decline in profits, the company said in its report.
Most of the profits of state-run energy companies have been battered by lower investment income and this has happened due to low interest rates prevailing in the banking sector.
For example, Jamuna Oil’s “other income” fell by 26% to Tk 38 crore.