July 21, 2024 5:07 pm
Home Stock Market Titas goes in the red after energy regulator slashes profit margin

Titas goes in the red after energy regulator slashes profit margin

by fstcap

Titas Gas Transmission and Distribution Company incurred a loss for the first time of Tk1.65 billion in FY23, as it claims that operating cost surpassed income.

The state-owned gas distributor’s profit margin narrowed as Bangladesh Energy Regulatory Commission (BERC) cut commission to Tk 0.13 from Tk 0.25 per cubic metre of gas in July 2022, said General Manager (Finance) Aparna Islam.

The gas distribution margin is the selling price of gas minus the purchasing price, which was Tk 0.13 that Titas earned in commission against every cubic metre of gas supplied in FY23.

“We will do well in future as the commission was hiked to Tk 0.21 in July [this year],” said Ms Islam.

However, according to energy specialist Professor M Shamsul Alam, Titas’ profit margin should be low as it serves the people.

The gas distribution margin of Tk 0.25 per cubic metre was
“significantly high”, said Mr Alam, who is serving as senior vice-president of the Consumers Association of Bangladesh.

“I believe the commission of Tk 0.13 was also high. Titas has already begun charging [prepaid] consumers meter rent. Now, the government has increased it [commission] to Tk 0.21, which is unexpected.”

The company, which enjoys a monopoly on pipeline gas distribution in Dhaka and Mymensingh, earned a profit of Tk 3.18 billion in the previous fiscal year.

It had made good profits in the years before since its establishment in 1964.

The company’s board of directors recommended 5% cash dividend at a meeting on Wednesday for FY23, the lowest since its 2008 listing.

It reported a loss of Tk 1.67 per share for FY23, as opposed to a profit of Tk 3.21 per share for the previous fiscal year, according to a stock exchange filing on Thursday.

Its net asset value per share stood at Tk 71.75 for FY23, down from 74.16 a year earlier.

The net operating cash flow per share (NOCFPS) went up to Tk 12.30 in FY23, from Tk 0.30 a year ago.

Meanwhile, the stock has remained stuck at Tk 40.90 since October last year.

Titas Gas was listed on the Dhaka and Chattogram bourses in 2008 under direct listing by offloading 25% of shares in the stock market. Currently, Petrobangla holds 75% of the company’s shares.

Titas Gas transmits natural gas from the gas fields to different areas for power, fertiliser, industrial, commercial, captive power, feed gas for CNG, and domestic consumers.

Titas gas profit margin

Source: The Financial Express

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