FE REPORT
Despite higher revenue, Power Grid Company endured losses for the second year in a row in FY24, owing to a significant forex conversion loss.
However, the state-owned power transmission company reduced its loss by 27 per cent year-on-year to Tk 4.57 billion in FY24, with a 14 per cent rise in revenue in the year compared to the year before.
The stability in the forex market also helped the company achieve a 13.9 per cent year-on-year cut in its foreign exchange transaction loss to Tk 10.98 billion in FY24.
Power Grid has a huge amount of foreign loans, taken for development works and required to be paid back in dollars. The loss has been determined on the basis of the exchange rate on the last day of the financial year.
At the end of FY24, the company's dollar conversion rate was Tk 118. If the dollar appreciates further in the future, forex loss will increase.
Power Grid's long-term debt burden jumped 25 per cent year-on-year to Tk 506.6 billion in FY24 as the state-run entity took on projects to expand transmission lines.
The company has been receiving funds from development partners through the government and the government itself as a share money deposit to build the country's power transmission infrastructure.
Due to the losses, the board of directors has declared no dividend for FY24.
"As the retained earnings became negative, the company was not in a position to pay dividends by using reserves," said the company in its earnings note.
Power Grid's retained earnings stood at Tk 4.68 billion in the negative as of June last year.
Following the earnings disclosure, the stock plunged almost 16 per cent to Tk 33.3 per share on Sunday on the Dhaka bourse. Investors were on heavy sell-off from the beginning of the trading session.
The company published its audited financial statement for FY24 on Sunday after a delay of about three months. The delay occurred in the absence of independent directors and was approved by the securities regulator.
Listed companies have to publish annual statements within 120 days after the closing of their financial year.
Company officials explained that after the ouster of the Sheikh Hasina-led government in August last year through mass protests, the board underwent changes and so it could not hold meetings for publishing annual financial results on time.
The company made a profit of Tk 1.97 billion in the nine months through March 2024 but the income was wiped out by a heavy loss in the final quarter.
The financial statement does not contain any explanation of the hefty loss in Q4.
Company secretary Md Jahangir Azad could not be reached by phone for comments.
Power Grid, a subsidiary of the Bangladesh Power Development Board (BPDB), is the government's sole entity for planning, developing, operating, and maintaining an integrated and efficient power transmission system across the country.
Earlier, it maintained a consistency in profits, enjoying a monopoly in business.
Performance in Q1 of FY25
Power Grid's losses more than doubled year-on-year to Tk 2.56 billion in July-September of FY25, despite higher revenue, according to a quarterly report published also on Sunday.
As a result, its earnings per share stood at Tk 2.81 in the negative for Q1, as against Tk 1.11 (diluted) in the same quarter of the previous year after it had disbursed shares to the power division secretary against share money deposits.
Its revenue rose 12 per cent year-on-year to Tk 8.47 billion in the July-September quarter, but the foreign exchange conversion loss jumped 70 per cent to Tk 6.11 billion, leading to heavy losses.
The company said the dollar conversion rate was Tk 118 as of June 2024, which went up to Tk 120 at the end of September last year while Euro conversion rate moved up from Tk 126.46 to 133.96.
Its long-term debt also grew almost 3 per cent in the first quarter through September 2024 to Tk 521 billion from June last year.
Shares issued against share money deposits
Power Grid issued 201.08 million ordinary shares and 7.64 billion irredeemable and non-cumulative preference shares in favour of the power division secretary in June last year.
The ordinary shares were issued at Tk 20 each, with a Tk 10 premium, and preference shares at Tk 10 each.
Hence, the total number of shares surged to 913.80 million from 712.72 million.
Although irredeemable and non-cumulative preference shares are not included into equity shares, they increase fixed payment liabilities for the company.
The government injected funds into the company for implementation of several projects since its inception in 2000.
The outstanding amount of such share money deposits was Tk 105.48 billion at the end of FY23, which increased to Tk 118.73 billion by the end of FY24.
Power Grid issued shares worth Tk 105.48 billion in favour of the power division secretary in June last year.
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