Titas Gas posts lowest profit in 5 years

The steep rise in liquefied natural gas (LNG) prices in the global market and the regulatory decision on reducing the charge for distributing gas have put an ominous impact on the profit of the state-owned Titas Gas Transmission and Distribution Company Limited (TGTDCL).

The state-owned company posted a Tk 318 crore in net profit in the fiscal year 2021-22 against the figure of Tk 345 in the previous fiscal.

The profit the company registered in FY22 was also the lowest in the last five years.  

The Bangladesh Energy Regulatory Commission (BERC) recently reduced the company’s charge for the distribution per cubic meter of gas to clients to Tk 0.13 from Tk 0.25.  

Due to this reduction, the profit of the state-owned gas distribution company slumped by about Tk 28 crore, said Arpana Islam, director (finance) at TGTDCL.

The board of directors of the company recommended a 10 per cent cash dividend for the fiscal year 2021-22, which was also the lowest since 2012. 

The company had paid a 22 per cent cash dividend for FY21 and a 26 per cent cash dividend both for FY20 and FY19.

The company is scheduled to hold its annual general meeting (AGM) on November 29 while the record date is fixed as November 3.

“The LNG prices soared significantly in the global market due to the Russia-Ukraine war, which was another prime cause that led to shrinking our profit,” Titas Company Secretary, Lutful Haider Masum told The Business Post.

“Titas needs to use the LNG to boost gas pressure in its supply lines,” he added. 

“LNG is currently being imported from Qatar as well as from the open market. But the rising LNG prices in the spot market have pushed our costs up, affecting the profit as well, Lutful Haider commented. 

The Company reported earnings per share (EPS) of Tk 3.21, net asset value (NAV) per share of Tk 74.16, and net operating cash flow per share (NOCFPS) of Tk 0.30 in FY22

These figures were Tk 3.50, Tk 72.57, and Tk negative Tk 1.11 respectively for the FY21. 

Titas which got listed in 2008 was welcomed by investors as they had paid significant attention to the company’s stocks at the time of its listing.  

Titas was also alluring foreign investors to put their funds into the company’s stocks with its guaranteed market, fixed profit margins, and consistent cash dividends. 

However, in the middle of the last decade, the BERC began to lower the then-approved charges for the company for its gas distribution to clients.

Foreign shareholders had also reacted immediately by selling Titas stocks and their trust in the state-owned enterprise has yet to be restored.

As on September 30, 2022, the government held a 75 per cent stake in the company, while institutions own 14.99 per cent, foreign investors 0.18 per cent, and the general public 9.83 per cent. 

The company’s stock was traded at Tk 40.90 per share on the trading floor of the Dhaka Stock Exchange on Thursday.