Summit Power’s profit falls 26 percent

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Summit Power Ltd (SPL) reported a 26.28 percent lower profit for the year ended June 30.

The independent power producer reported 2021-22 consolidated earnings per share of Tk3.87, equivalent to Tk. 5.25 in the previous financial year.

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Consolidated NAV per share was Tk 35.72 compared to Tk 34.45 in 2020-21. The consolidated operating net cash flow per share in 2021-22 was 5.91kk compared to 8.53k in the previous year.

The board recommended a cash dividend of 20 percent for 2021-2022.

In a post on the Dhaka Stock Exchange yesterday, SPL said it has not declared any dividend from the capital reserve account, the revaluation reserve account, or from unrealized gains or from gains made prior to the incorporation of the company, if any, or by reduction of the paid-in capital or other measures so that the revenue reserves become negative or debit-side after the dividend.

This year, the cash dividend offered by SPL was lower than in previous years for a number of reasons, a company representative said.

Three power plants were idle for most of the fiscal year due to the completion of previous Power Purchase Agreements (PPAs) and extensive pre-planned maintenance.

Also, the tariff has dropped in new PPAs under the “No Electricity, No Payment” model.

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

In order to ensure fuel supply, SPL must maintain much larger working capital and bear significantly higher financing costs.

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

SPL owns and operates 15 power plants with a total capacity of 976 megawatts. An additional 163 MW was supplied by associate Khulna Power Company Ltd. added.

The power plants account for 10.3 percent of the installed capacity of privately operated electricity plants in Bangladesh.

The company’s shares closed unchanged at Tk 34.10 on the DSE yesterday.

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

The new LCs are to be opened specifically for Summit Barisal Power Ltd, Summit Narayanganj Power Unit II, Ace Alliance Power and Summit Gazipur II Power Ltd to allow them to smoothly continue their operations according to the commitments of the companies under their respective power purchase contracts with the government, said SPL in another post.

The advance payments will be made in proportion to SPL’s and SCL’s equity interest in the respective projects, either by raising necessary loans from local banks or financial institutions or by using SPL’s own cash resources.

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