Dhaka Electric Supply Company (DESCO) secured a profit of Tk 583 million in the first quarter through September this year, marking a strong turnaround from a loss of Tk 322 million in the same quarter last year.
Higher distribution revenue and foreign exchange gains due to favorable exchange rates are two key reasons behind the significant improvement in the business of DESCO, according to the company's earnings note.
DESCO, which distributes electricity to the capital's western and north-eastern areas, gained Tk 282 million in foreign exchange transactions in the quarter to September this year, whereas it endured a loss of Tk 713 million in this segment during the same period last year.
Revenue, particularly from supply of electricity, rose 6.6 per cent year-on-year to Tk 22.74 billion in July-September, according to unaudited financial statements published on Thursday.
The company's distribution margin increased in February this year-from Tk 7.02 to Tk 12.82-for every Tk 100 worth of power distributed. That helped make a profit of Tk 1.47 per share in the first quarter of FY26.
The distribution margin is the gap between the price at which DESCO purchases electricity and the price at which it sells at the retail level.
The government in March last year raised the bulk electricity price by 5 per cent on average to Tk 7.04 per unit. The average retail price also increased from Tk 8.25 to Tk 8.95 per unit.
Following the earnings disclosure, the stock of DESCO jumped more than 6 per cent to Tk 19.40 per share on Thursday on the Dhaka Stock Exchange, despite the overall market closing in the deep red.
DESCO has a huge amount of foreign loans taken for various development works. The repayment must be made in dollars. The foreign exchange gain or loss has been calculated based on the exchange rates on the last day of the quarter.
The company's dollar-taka exchange rate was Tk 121.82 at the end of September this year down from Tk 122.85 in the same quarter last year.
DESCO's long-term loans, including the money from the Asian Development Bank and the Japan International Cooperation Agency, stood at Tk 29.37 billion in September this year, slightly reduced from Tk 29.48 billion in June this year.
DESCO endured heavy losses in FY23 as the government had increased the bulk electricity price without increasing retail prices.
While on one hand the profit margin shrank, on the other the foreign debt burden turned heavier due to the depreciation of the taka against the dollar.
The state-owned entity experienced a cumulative loss of Tk 11.71 billion in the three consecutive years to FY25.
The company in a statement said it had come out of the red due to efficient cost management under the leadership of the new board of directors.
Meanwhile, DESCO issued more than 607 million preference shares at the face value of Tk 10 each in favour of the power division secretary against funds received from the government.
The company is also in the process of issuing 2.38 million more preference shares at Tk 10 each against share money deposits.
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