Doreen Power to sell another plant

Doreen Power Generations and Systems has announced that it will sell another power plant in Feni a month after it sold its Tangail plant upon the expiry of its 15-year power purchase contract with the government.

The board of the independent power producer took the decision due to the uncertainty hanging over the extension of the power purchase agreement with the Bangladesh Power Development Board (BPDB), the company said in a stock exchange filing on Monday.

It also approved a vendor agreement with Trust Marine Services for the sale of engines, alternators, including accessories, substation equipment, building, and steel structures of the Feni 22 MW Power Plant worth Tk 100.50 million.

"Land will be sold at a competitive market price to suitable customers in future," said the company.

Following the news, the stock plunged 2.75 per cent to close at Tk 21.2 per share on Monday on the Dhaka Stock Exchange. The stock plummeted 65 per cent since the removal of the floor price in January this year.

Established in 2007, Doreen Power has been operating three plants with the capacity of 22 megawatt power each at Feni, Tangail and Narsingdi on build own and operate (BOO) basis for a term of 15 years.

All three plants were shut between November last year and February this year as its power purchase deal with the government expired.

Last month, Doreen Power announced the sale of its non-current assets of the Tangail plant worth Tk 100.50 million, as the government did not extend the agreement.

However, the Narsingdi power plant received a five-year time extension in February this year on "no electricity no payment basis".

Doreen Power holds almost 100 per cent stakes in three subsidiaries --- Dhaka Southern Power Generations, Dhaka Northern Power Generations, and Chandpur Power Generation (Heavy fuel oil) with a combined capacity to generate 225 megawatt.

Financial performance

Doreen Power suffered a loss of Tk 108 million in the January-March quarter this year, as against a profit of Tk 187 million in the same quarter last year, due to a significant decline in the sales revenue.

Its consolidated revenue plunged almost 60 per cent year-on-year to Tk 1.53 billion in January-March this year.

The company said the power purchase agreement of all three plants had expired and the demand for electricity from its subsidiaries was lower in January-March than in the corresponding period last year.

But all other costs, such as operating and finance expenses, were constant, dragging the company into the red.

However, its nine months' profit grew 24 per cent year-on-year to Tk 406 million through March this year although sales revenue dropped 38 per cent to Tk 8.56 billion during the time.

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