Doreen Power back to profits in March quarter, profitability still low

Doreen Power Generations and Systems Limited made a profit in the January to March quarter of the ongoing 2022-23 fiscal year, which was a loss in the previous quarter.

In the third quarter of FY23, the company's earnings per share (EPS) stood at Tk1.03. In the previous October to December quarter, it incurred a per share loss of Tk1.23.

And compared to the March quarter of FY22, the company's same quarter EPS in FY23 was 66% lower.

Although the company returned to profits in the latest quarter from the previous one, its profitability is still low compared to the past few quarters.

The company said in its Dhaka Stock Exchange (DSE) filing on Tuesday, year-on-year EPS declined by more than half because of the strengthening of the US dollar against the taka that deepened the company's exchange losses from foreign currency transactions.

Besides, Doreen Power has built three new power plants which significantly increased their bank loans. In that ratio, the finance cost has increased almost ten times, according to a senior analyst of a brokerage firm.

Also, the company has to pay bills for the import of raw materials or fuel oil by buying dollars at a high price. But the government is giving dollars at a reduced rate. So, the profit margin of the company has decreased, he added.

In the first nine months of FY23, the company's EPS fell by 76% to Tk1.79, compared to the same period previous fiscal.

Its shares are stuck at the floor price of Tk61 each since November last year at the DSE.