The Dhaka Electric Supply Company, or DESCO, which started operating over two decades ago, has posted a massive loss of Tk 5.41 billion in the past fiscal year, the largest in its history.
Managing Director Kausar Ameer Ali says the vast differential for the listed company is due to the depreciation of the taka against the dollar and for selling power at prices below the production cost. The depreciation of the taka accounted for Tk 4.28 billion of the total loss, while selling at a discount led to losses of Tk 1.13 billion.
Despite taking huge losses, the company will still pay dividends of Tk 1 per share to shareholders for a total of approximately Tk 397.57 million.
The funds will come from the company’s reserves of Tk 22.21 billion. From July 2022 to June 2023, the company has reported losses of Tk 13.61 per share. The company has a total paid-up capital of Tk 397.57 million. The entirety of the loss came in the nine months from October last year to June this year. From July to October last year, the company made a profit of Tk 0.29 per share, or over Tk 115 million. Then, from October to December, each share led to losses of Tk 0.08, or Tk 31.8 million.
As a result, until December last year, the company was still earning a profit.
From January to March this year, the company made losses of Tk 1.45 billion before it ballooned to losses of Tk 4.04 billion from April to June.
Asked about the staggering losses, DESCO MD Kausar told bdnews24.com, “In this financial year, the Power Development Board raised the wholesale price of electricity by 28 percent. But we only raised the retail price by 15 percent. The price difference has led to losses.” But the lion’s share of losses came from the depreciation of the taka, he reiterated. “The loans taken from foreign countries must be paid in dollars. As the price of the dollar has gone up, so has the cost of repaying our debts. We earn in taka and pay our debt in dollars. That creates a difference.” “When we took out the loan, the exchange rate was Tk 82 to $1. Now, one dollar goes for Tk 109 – 110. An additional Tk 4.28 billion was spent just because of this.”