Energypac Power’s profit takes a tumble

Energypac Power Generation announced that its profits tumbled in the July-September quarter of 2020 ahead of its trading debut in the Dhaka Stock Exchange (DSE) today.

Energypac's profits dropped 98 per cent year-on-year to Tk 6.64 crore in the period because of the ongoing coronavirus pandemic.

Humayun Rashid, managing director of Energypac Power Generation, said they produce industrial products and their sales declined as private investment slowed down amid the Covid-19 fallout.

"As the pandemic hit the private sector during the July-September period, our profits dropped," he said.

"Our profits will jump with the revival of the economy, as our products are directly related to industrialisation," Rashid added.

Energypac Power Generation raised a fund of Tk 150 crore through its initial public offering (IPO), the proceeds of which will be used to make liquid petroleum gas (LPG) more available as a primary fuel source for vehicles in Bangladesh and repay the company's bank loans.

The applications for the company's shares had been oversubscribed by 10.76 times. Following bidding from institutional investors, its cut-off price for primary shares was set at Tk 35 per share.

At the end of fiscal 2019-20, the company's consolidated revenue was Tk1,097 crore, which was 24 per cent lower compared to the previous year. However, its net profit grew by 21 per cent to Tk 58.18 crore.

Established in 1995, Energypac is a major supplier of base load and standby gas and diesel generators and provides solar panels and its accessories, operates and maintains independent power plants, CNG transmission, distribution, refueling stations and conversion kits, importing and marketing JAC automobiles, machinery and materials, spare parts, installation and service.

The country has around 20 companies that sell around 10,000 buses and commercial vehicles a year and the market is growing by 10 to 15 per cent annually, according to the company's IPO prospectus.

Bangladesh's LPG demand is only 2 per cent of its total oil demand and less than 0.01 per cent of the total energy demand. However, LPG demand is expected to grow significantly as an alternative to household cooking fuel and transportation fuel, it said.

The power engineering company, which is certified by the International Organisation for Standardisation, introduced its G-Gas LPG brand as a part of its efforts to meet the country's growing demand for clean energy.

G-Gas LPG currently offers household, commercial, bulk LPG and auto-gas solutions across the country.

Around 26 km away from Khulna city, the G-Gas plant was established in Dacope upazila in 2011.

At present, G-Gas is providing fuel services to 3.5 lakh customers and as per the company's calculations, they currently have a market share of 9 per cent.