Summit Power secured a remarkable 51 per cent year-on-year growth in profit to Tk 3.34 billion in FY24, driven by lower import costs amid stable foreign exchange rates.
Its consolidated earnings per share (EPS) rose to Tk 3.13 in FY24 from Tk 2.07 the year before, according to a stock exchange filing on Tuesday.
The stable foreign exchange rates in FY24, compared to the previous year, contributed to the year-on-year profit growth, said the company in its earnings note.
Operations of power companies depend mostly on imports, and so when the taka loses its value against the dollar, pricier fuel in the global market gets even pricier, denting companies’ bottom-line growth.
Summit Power explained that import cost of heavy fuel oil (HFO) was higher in FY23 compared to FY24.
The cost of sales, which includes all associated costs to produce power, stood at Tk 23.60 billion, which was 78 per cent of revenue earned in the nine months through March last year, down from 85 per cent of the revenue in the same period a year ago.
The annual figures of cost of sales and revenue are yet to be available.
Owing to policy measures taken by the Bangladesh Bank, the dollar-taka exchange rates remained stable in FY24, compared to the previous year, narrowing the gap between formal and kerb markets.
Moreover, the central bank stopped day-to-day interference in the forex market, which also helped ease rate fluctuations, bankers say.
As a result, Summit Power’s exchange loss in foreign currency transactions fell in FY24.
Apart from stable foreign exchange rates, a reduction in the cost of power generation, due to a decline in the price of furnace oil in the global market, also helped the company secure a higher profit in the year.
Meanwhile, there was a rise in bulk tariffs for electricity. The government in March last year raised the bulk electricity price by 5 per cent on an average to Tk 7.04 per unit.
Summit Power declared a 10 per cent cash dividend for FY24, the same as for FY23, despite the profit growth.
The company will disburse Tk 1.06 billion in cash dividends to shareholders for FY24 from its profit of Tk 3.34 billion, meaning it will retain two-third of its earnings of the year.
It will hold an annual general meeting (AGM) on April 13 to get approval of the recommended dividends. The record date is March 10.
Summit Power is yet to disclose detailed financial statements of FY24.
In the nine months through March last year, the revenue of the largest independent power producer dropped 35 per cent year-on-year to Tk 30.30 billion.
The consolidated net operating cash flow per share, a measure of a company’s ability to generate cash from its operations, stood at Tk 6.13 per share in FY24, down from Tk 7.04 the year before.
The consolidated net asset value, which refers to the excess of total assets over total liabilities, went up to Tk 41.44 per share in June 2024 from Tk 38.02 per share in June 2023.
Despite the buoyant business performance, the stock of Summit Power remained static at Tk 16.3 per share on Tuesday on the Dhaka Stock Exchange.
Summit Power published its annual financial results for FY24 three months after the schedule on receiving regulatory approval, saying it was waiting for payment settlement by the government.
Incorporated in Bangladesh in 1997, Summit Power is a subsidiary of Singapore-based holding company Summit Power International (SPI).
Presently, Summit owns and operates 15 power plants at different locations in Bangladesh, with a total installed capacity of 975.96 MW, according to its website.
Summit Power supplies electricity to the Bangladesh Power Development Board (BPDB) and the Bangladesh Rural Electrification Board (BREB) as per power purchase agreements with them.
https://today.thefinancialexpress.com.bd/stock-corporate/summit-powers-income-rises-51pc-in-fy24-on-import-cost-cuts-1739896644
