Summit Power’s profit falls 26pc

Summit Power Ltd (SPL) posted a 26.28 per cent lower profit in the financial year that ended on June 30.    

The independent power producer reported consolidated earnings per share of Tk 3.87 in 2021-22, which was Tk. 5.25 in the previous financial year.

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Consolidated net asset value per share was Tk 35.72 compared to Tk 34.45 in 2020-21. Consolidated net operating cash flow per share stood at Tk 5.91 in 2021-22 against Tk 8.53 a year ago.

The board of directors recommended a 20 per cent cash dividend for 2021-2022.

In a post on the Dhaka Stock Exchange yesterday, SPL said no dividend has been declared out of the capital reserve account, the revaluation reserve account, or any unrealised gain or out of profit earned prior to the incorporation of the company, if any, or through reducing paid-up capital or doing anything so that the post dividend retained earnings become negative or a debit balance.

This year, the cash dividend offered by SPL was lower from previous years for several reasons, said an official of the company.

Three power plants were in shutdown conditions for most of the financial year due to the completion of previous power purchase agreements (PPAs) and major pre-scheduled maintenance works.

Also, the tariff in new PPAs has decreased under the 'No Electricity, No Payment' model.

In addition, the current global scenarios have resulted in higher prices of fuel, lubricants, spare parts, delay in receiving payment, and the USD-BDT exchange rate, said the official. 

In order to secure fuel supply, SPL needs to keep a much larger working capital and bear a substantially higher financing cost.

"It has retained a percentage of earnings for business expansion to explore opportunities in renewable energy and other areas," said the official.

SPL owns and operates 15 power plants with a combined capacity of 976 megawatts. Another 163 MW has been added through its associate Khulna Power Company Ltd.

The power plants account for 10.3 per cent of the installed capacity of the privately run electricity units in Bangladesh. 

Shares of the company closed unchanged at Tk 34.10 on the DSE yesterday.

SPL, along with co-sponsor Summit Corporation Ltd (SCL), also intends to enter into an agreement with Summit Oil and Shipping Company Ltd (SOSCL) to provide necessary advances to the latter to settle outstanding and new letters of credit LCs.

The new LCs are to be opened particularly for Summit Barisal Power Ltd, Summit Narayanganj Power Unit II, Ace Alliance Power, and Summit Gazipur II Power Ltd so that they can continue their operation smoothly in accordance with the obligations of the companies under their respective power purchase agreements with the government, said SPL in another post. 

The advances will be provided in proportion to the equity shareholding of SPL and SCL in the respective projects either by taking necessary loans from local banks or financial institutions or utilising SPL's own source of cash.