Most listed power companies’ profits down

Nine of the companies witnessed a drop in profits while two companies incurred losses and the remaining eight recorded higher profits

Profits of listed fuel and power generation companies altogether dropped in the January-March period of the current financial year of 2021-22 due to some power plants shutting down, an increase in the price of raw materials and a decrease in investment income.

Profits of 19 companies altogether dropped 11.6 per cent year-on-year to Tk 917 crore, according to data compiled by the Sandhani Asset Management Company.

Nine of the companies witnessed a drop in profits while two companies incurred losses and the remaining eight recorded higher profits.

The profits went down for some due to several plants shutting down on expiry of their power purchase agreements with the government, said Mir Ariful Islam, managing director and CEO of Sandhani Asset Management.

The company is a fund manager that conducts analysis on fuel and power companies to make investments.

Although some companies inked agreements afresh, their conditions are different, he said citing examples of Summit Power International and Khulna Power Company.

Profits of Summit Power Internal plunged almost 30 per cent to Tk 154 crore in the three-month period, according to the company's financial report.

The profit fell because there were no operations at three power plants for several months due to the expiry of power purchase agreements, the company said.

Meanwhile, the government renewed the agreements for two years on the condition of "no electricity, no payment".

Khulna Power Company incurred a loss of Tk 2.21 crore in the third quarter of 2021-22 whereas it logged profits of Tk 41 crore in the same period the previous year, according to the financial report.

Its profits dropped mainly due to the commercial operations of both its plants shutting down.

Some of the companies logged 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.

Raw material prices rose for some of the companies, which impacted their profits. Some listed energy companies saw lower profits due to low income generated by other investments.

Profits of MJL Bangladesh went down as the cost if its raw materials were higher than its turnover.

Its profits dropped to Tk 46 crore in the January-March quarter of 2022 while it was Tk 58 crore in the same period the previous year, according to the company's financial report.

Its consolidated revenue increased by 21 per cent in the quarter but consolidated cost of goods sold rose even more, by 28 per cent, and that was a reason for the fall in profits, the company said in its report.

Most of the state-run energy companies' profits were battered by lower income from investments and this happened due to the low interest rates prevailing in the banking sector.

For instance, "other income" of Jamuna Oil dropped 26 per cent to Tk 38 crore.