United Power's profit up 34pc on tariff hike, higher revenue

United Power Generation & Distribution Company posted a 34 per cent year-on-year profit growth to Tk 4.24 billion for the third quarter of FY25, driven by higher revenue following a bulk power tariff hike.

The power generation company's consolidated earnings per share (EPS) stood at Tk 7.21 for the March quarter, up from Tk 5.39 for the same period in FY24, according to its unaudited financial statement published on Thursday.

In its earnings note, the company attributed the profit growth to a rise in bulk electricity tariffs, stable production levels, and relatively consistent foreign exchange rates, compared to the same period last year.

The government in March last year raised the bulk electricity price by 5 per cent on an average to Tk 7.04 per unit.

The United Power's sales of electricity jumped 29 per cent year-on-year to Tk 9.58 billion in the January-March quarter this year.

The company's nine months' profit also escalated by 46 per cent year-on-year to Tk 11.35 billion while electricity sales rose 17 per cent to Tk 30.59 billion through March this year.

The United Power is the country's first commercially independent power producer. It supplies power to Bangladesh Export Processing Zones, Bangladesh Rural Electrification Board, Bangladesh Power Development Board, and private customers.

The United Power's revenue from Bangladesh Rural Electrification Board, Bangladesh Export Processing Zones, and Bangladesh Power Development Board increased 53 per cent, 28 per cent and 15 per cent respectively in the nine months through March this year, compared to the same period of the previous year.

However, revenue from private customers dropped 9 per cent year-on-year to Tk 953 million in nine months through March this year.

Unlike other private power producers, two plants of the United Power at the export processing zones of Dhaka and Chattogram directly sell power to factories at a negotiated price.

Another factor that boosted profits was a reduction in foreign exchange loss during the period. United Power's exchange loss in foreign currency transactions in July-March period of last fiscal year was Tk 1.04 billion, which came down to Tk 128 million in the same period of this fiscal year.

Lower power generation cost also helped the company secure a higher profit. Electricity generation costs slid due to the price fall of furnace oil in the global market.

The cost of sales, which includes all associated costs to produce power, stood at Tk 18.76 billion, 61 per cent of total revenue earned in July-March this year, down from 64 per cent of the revenue in the same period of the previous year.

The consolidated net operating cash flow per share, a measure of a company's ability to generate cash from its operations, also rose to Tk 15.17 in nine months of FY25 from Tk 7.65 in the same period of FY24.

The company explained that cash flow had increased due to the substantial increase in collection of receivables from customers.

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