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Power producer Summit Power reported a 44 per cent plunge in profit for the third quarter of FY25, as its three plants, which started operating under 'No Electricity, No Payment' arrangement, received no capacity charge during the period.
Hence, the earnings per share (EPS) fell sharply to Tk 0.39 in the January-March quarter from Tk 0.69 in the same quarter a year ago, according to a stock exchange filing on Sunday.
Private sector power producers, such as Summit Power Limited, have been experiencing a decline in business as the government has changed its strategy to generate electricity and mitigate the growing demand.
Most of the existing power producers have failed to secure renewal of power supply agreements with the government upon the expiry of previous contracts.
Quick rental power plants are being phased out because they are costly - partially for capacity charge payments --, inefficient, and rely heavily on imported fuels. There has been a gradual shift towards more reliable and cost-effective sources, such as coal and LNG, alongside efforts to promote renewable energy.
Summit Power had eight power plants, out of which only three got their deals renewed until November 2028.
Out of the remaining five plants, one plant had its contract expired and another received no demand from the National Load Dispatch Centre (NLDC).
The remaining three power plants ran on "No Electricity, No Payment" basis during the quarter through March. They were shut down in April this year.
This is the backdrop against which revenue in the third quarter through March fell 5 per cent to Tk 7.99 billion, compared to the same period of the previous year, whereas the cost of sales was up 2.5 per cent year-on-year to Tk 6.19 billion in the quarter due to a large amount of fixed costs.
"Income tax expense was higher in the current period as more plants came under tax bracket after expiry of initial PPAs," said the company.
The July-March profit also slid 39.07 per cent year-on-year to Tk 1.56 billion although revenue rose 7.12 per cent year-on-year in the nine months through March to Tk 32.45 billion.
Meanwhile, the stock rose 2.16 per cent to Tk 14.20 per share on Sunday on the Dhaka Stock Exchange despite the shrinking profit.
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