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Summit Power Limited, a listed fuel and power sector company, registered the lowest profit in six years as its four power plants that generate electricity under the power purchase agreements (PPA) with the government, were out of operations for their term expiries.
The company announced a 20 per cent cash dividend for its shareholders on Thursday after reviewing its business made in the fiscal 2021-22.
According to the disclosure, it posted the lowest profit in the last fiscal compared to that in the previous five fiscals.
The power generating company posted a net profit of Tk413 crore in the fiscal 2021-22, which was 26 per cent lower as against Tk560 crore in the previous fiscal.
This figure was the lowest compared to the profits made in the previous five years each as well.
Summit Power’s consolidated earnings per share at the end of the last fiscal stood at Tk3.87 as against Tk5.25 in the previous fiscal.
In the past six years, the company had posted the highest net profit in the fiscal 2020-21 worth Tk560 crore.
In that year, its revenue earning stood at Tk3967 crore.
The company had paid a cash dividend of 35 per cent to its shareholders for that year backing on the soaring income.
The company had secured a net profit of Tk552 crore in the fiscal 2019-20, Tk 510 crore in 2018-19 and Tk469 crore in the fiscal 2017-18
According to information available on the DSE website, the government’s power purchase agreement (PPA) with four out of Summit’s 15 power plants expired in 2021.
The company, however, did not disclose any information to DSE about whether these power plants were again restarted or whether the contracts were extended.
The contracts of two of these four power plants had expired in December 2021, while the rest two saw expiries in March same year.
Mohsena Hasan, a senior official of Summit Power, told The Business Post, “The terms of our power plants whose tenure had expired, has again been extended. But the government’s condition that they would only pay price if they purchase electricity, went opposite to us; so our production went down, shrinking the revenues subsequently.”
“Besides contracts with the government, we are now looking to invest in renewable energy as an alternative revenue generating source,” she added.
According to the financial report for the fiscal 2020–21, the company’s incomes were Tk69 crore, and Tk41 respectively from Madhabdi Power Plant Unit-2 and Summit Chandina Power Plant Unit-2 respectively, two power plants that saw term expiry.
Besides, Summit Madanganj Power Plant, another expired power plant generated revenue of Tk 108 crore in the same fiscal. The rest one was Narayanganj Power Plant Unit 1.
Summit Power will hold its annual general meeting (AGM) on October 31 next to for the approval of the declared dividend for the fiscal 2021-22.
After the recent disclosure, Summit Power’s share price remained unchanged Tk34.10 per share on the DSE trading floor.
