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Summit Power Limited’s (SPL) net profit plunged by 20.1 per cent in the fiscal year 2021-22 as seven out of its 12 operational power plants registered decresed sales in the year.
Of the 12 Summit power plants, only 5 plants including its four subsidiaries, posted a year-on-year profit increase.
The company posted a net profit of Tk 673 crore in FY22 which was 20.1 per cent lower than the figure of Tk 842 crore in the previous year.
Of the amount, as much as Tk 454 crore was generated from its four subsidiary power plants, while the remaining Tk 219 crore was produced from two of its plants.
Six out of its 8 own power plants registered a decline in profit in the year.
Provision for bad debt and impairment losses, and the soaring operating costs due to the devaluation of taka against the dollar, caused a decrease in net profit in the last fiscal (FY22), said a company insider.
SPL operates a total of 15 power plants including its four subsidiaries, while it is a partner of Khulna Power Company Limited (KPCL) and Summit Meghnaghat Power Company Limited (SMPCL), two listed companies.
On the board of these two companies, Summit owns 17.64 per cent and 30 per cent stakes respectively.
The company’s consolidated gross profit margin decreased in FY22 as its powers plants including Narayanganj Power Plant Unit-1, Chandina Power Plant Unit-2 and Madhabdi Power Plant Unit-2 remained inoperative for a long time in the year due to the expiry of the power purchase agreements (PPAs) with the government.
These power plants, however, could function, but the ‘No Electricity No Payment’ system introduced by the government led them to remain idle.
Khulna Power Company Limited (KPCL), which is also a listed company, announced a 12.5 percent cash dividend for fiscal 2021-22, while KPCL declared a dividend only for general shareholders for the same year.
Summit and all its associate power plants have a capacity of 3,000 megawatts (MW).
Summit also set up the country’s first private off-dock port facility — Summit Alliance Ports Limited — which handles about 25 per cent of Bangladesh’s export volume and about 7 per cent of the country’s import volume.
Mohsena Hasan, a high official at Summit Power, recently told The Business Post, “The terms of our three power plants whose (PPA) tenures had expired, have been extended once again. But the government’s condition that they would pay if they only purchase electricity, worked against us, reducing our production and subsequently the profit.”
“Alongside the contracts with the government, we are now looking to invest in renewable energy as an alternative revenue source,” she added.
The company’s earnings per share (EPS) fell by 26.3 per cent to Tk 3.87 in FY22.
Its net asset value (NAV) per share stood at Tk 35.72 till June this year, whereas the value of total liabilities soared by 64 per cent meantime.
The consolidated cost of sales in the year FY22 increased by 49 per cent due to higher fuel costs, caused by the price hike in the global fuel market in recent months.
