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Most listed private power cos see profit growth in FY21

Higher income from subsidiaries, corporate tax cut cited as reasons

BABUL BARMAN | November 08, 2021 00:00:00

Most listed power generation companies in the private sector logged higher profit year-on-year in the fiscal year (FY) 2020-21, thanks to higher income from subsidiaries, reduced corporate tax and lower interest rate.

Out of the 23 companies listed in the 'fuel & power' sector on the Dhaka Stock Exchange (DSE), nine are engaged in power generation owned by private sector people.

Of them, seven booked higher profit while two saw their profit declined in the FY2020-21 compared to the same period a year earlier, according to the audited financial statements.

Industry insiders said the government's incentive packages, corporate tax rate cut and increased revenue earnings from their subsidiaries helped private power generation companies make good profits.

Significant decrease in finance cost and reduction of interest rate compared to the last year had also a positive impact on the sector because most companies have big amounts of loans, they said.

Fuel & power is the most lucrative sector in the stock market as the companies in the sector are performing better and the government is relying more on private sector companies for power generation, according to a merchant banker.

The earnings per share (EPS) of United Power Generation & Distribution Company, Shahjibazar Power Company, Baraka Patenga Power, Doreen Power Generations & Systems, GBB Power, Baraka Power and Summit Power increased during the period under review.

EPS is the portion of a company's profit allocated to each outstanding share of common stock. In short, it serves as an indicator of a company's profitability.

Of the companies, consolidated EPS of United Power, a concern of United Group, surged the most, rising 83.59 per cent year-on-year to Tk 18.80 for the year ended on June 30, 2021.

The company saw a major boost in its earnings due to acquiring 99 per cent shares of United Anwara Power (UAnPL) and United Jamalpur Power (UJPL) last year. UAnPL has a 300 MW and UJPL 115 MW power plants.

"The jump in profit is due to the inclusion of this two power plants' of the fiscal year 2020-21," said the company in a disclosure.

The consolidated EPS of Shahjibazar Power rose to Tk 6.53 for the year ended on June 30, 2021 as against Tk 4.38, for the same period of the previous year.

Newly listed Baraka Patenga Power's consolidated EPS increased 48.05 per cent year-on-year to Tk 6.47 for the year ended on June 30, 2021, riding on higher-income of its own business and its subsidiaries during the period.

Another power company of the group, Baraka Power's consolidated EPS stood at Tk 2.96, an increase of 22.82 per cent from Tk 2.41 last year.

Doreen Power's consolidated EPS also jumped over 46 per cent year-on-year to Tk 8.09 for the year ended on June 30, 2021.

"Earnings have increased significantly due to the significant increase in revenue of its two subsidiaries," the company said in a disclosure.

A significant decrease in finance costs for reduction of the outstanding loan and the lower interest rates also helped boost the bottom line, it added.

GBB Power's EPS has increased 31.57 per cent to Tk 1.50 for the year ended on June 30, 2021as the company's total turnover increased significantly while corporate tax has reduced.

The consolidated EPS of Summit Power, a subsidiary of Summit Group and the first independent power producer in Bangladesh, stood at Tk 5.25 for the year ended on June 30, 2021, which was Tk 5.17 in the same period a year earlier.

However, the EPS of Khulna Power Company dropped to Tk 0.87 for the year ended on June 30, 2021 as against Tk 3.40 of the previous year as its two power plants --KPC 40MW Noapara Plant and KPC Unit II 115 MW plant-- remained shut as power purchase agreement (PPA) expired.

The newly listed Energypac Power Generation's consolidated EPS also declined by 39.95 per cent to Tk 2.30 for the year ended on June 30, 2021.

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