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Private power producers reliant on imported fuel as raw material experi- enced a sharp reduction in profit in FY23, compared to the previous fiscal year, as the taka continued to lose value against the dollar.
Three out of six electricity genera- tors that disclosed earnings for FY23 on Sunday reported a decline in prof- it, while two other firms went in the red for the first time.
All the organisations, which saw profit fall or endured loss, put the blame on the rising currency exchange rate.
United Power Generation
United Power Generation & Distribution Company, a major player among the private sector power pro-ducers, showed a 20% year-on-year drop in profit in FY23.
The board recommended providing 80% cash dividend to shareholders, the lowest since the company’s listing in 2015.
The deputy company secretary of United Power, Elias Howlader said the strengthening of the dollar had eaten up most of the expected earn- ings of the year.
The company’s earnings per share stood at Tk 13.81 for FY23, down from Tk 17.21 for the previous fiscal year, according to a stock exchange fil- ing on Sunday.
While the exchange rate kept rising, bank borrowings were made costlier to tame inflation.
The company reported a net operat- ing cash flow per share (NOCFPS) of Tk 19.40 for FY23, which was only Tk 1.89 for the previous fiscal year.
According to the company, the con- solidated net operating cash flows per Share jumped as a result of higher col- lection from customers during the reporting period (July 2022 to June 30, 2023) compared to the same period last year.
The NAV per share came down to Tk 53.22 for FY23 from Tk 56.38 reported for the previous fiscal year.
Meanwhile, the stock has remained unmoved at the floor price of Tk 233.70 on the Dhaka Stock Exchange (DSE) since November 10 last year.
Khulna Power Company
It reported negative earnings for the first time since listing in 2010.
It incurred a loss of Tk 663.68 mil- lion in FY23, as opposed to a profit of Tk 13.06 million in FY22.
According to the company, it sold a plant with 110MW capacity in FY23 at a price lower than what was record- ed on books. Hence, the price gap was adjusted with the earnings.
Besides, it had to keep operation shut for more than a year for the gov- ernment cancelled its power purchase deal with the company. The firm also stopped receiving capacity charge. Moreover, finance cost jumped due to delayed payments by Bangladesh Power Development Board (BPDB).
The company, however, declared 10% cash dividend for shareholders as much as it provided for the year before.
Its loss per share stood at Tk 1.67 for FY23, against a profit of Tk 0.03 for the previous fiscal year, according to a stock exchange filing.
The company reported a negative net operating cash flow per share (NOCFPS) of Tk 4.40 for FY23, which was Tk 2.01 for the previous fiscal year.
According to the compa- ny, NOCFPS became nega- tive mainly due to cash pur- chase of fuel from Bangladesh Petroleum Corporation (BPC) but delayed receipts of pay- ments from the BPDB.
The NAV per share came down to Tk 19.19 for FY23 from Tk 21.73 reported for the previous fiscal year.
Another fuel-based producer Shahjibazar Power Co. saw its profit plunge by 63% year-on-year in FY23.
It also cited higher cost on raw material due to the rising exchange rate as the reason for the profit decline.
The firm has declared an 11% cash dividend, the lowest since listing in 2014.
Baraka Patenga Power
Baraka Patenga Power Limited (BPPL) endured a loss for the first time after list- ing in 2021.
The company pointed out foreign exchange loss of subsidiary companies of subsidiary companies and in its own procurement of fuel and spare parts amid exchange rate fluctu- ations.
It has declared a 5% cash dividend, the lowest since 2021 listing.
Baraka Power Limited (BARKAPOWER), anoth- er fuel-based power produc- er, showed 74% reduction in profit in FY23 over FY22.
It declared 5% cash divi- dend, lowest since listing in 2011.
Gas-based electricity pro- ducer GBB Power disclosed a 9% increase in profit in FY23, compared to the pre- vious year.
"We don’t import fuel. Hence, escalation of the exchange rate didn’t impact us," said company secretary Mohammad Sattar Hossain.
The company declared only a 2% cash dividend, the lowest since the 2012 list- ing, despite the profit growth.
Source: The Financial Express