Energypac Power sinks into negative retained earnings as losses hit Tk393cr
The company attributed this massive spike in quarterly losses to skyrocketing interest expenses tied to its mounting debt.
Energypac Power Generation PLC, once a leading player in the country's power and energy sector, is now grappling with a severe financial crisis, as persistent losses have left the company with negative retained earnings.
Since the fiscal 2022-23, the company has accumulated losses totalling Tk393 crore, a downturn that has entirely eroded its financial cushions and left it with negative retained earnings of Tk142 crore as of March 2026.
The company's latest financial performance for the first nine months of FYFY26 highlights a deepening struggle. Revenue for the July-March period plunged by 26% to Tk177.21 crore, culminating in a staggering net loss of Tk144.90 crore.
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While the January-March quarter saw a 15% uptick in revenue to Tk75.62 crore – driven primarily by increased demand for Liquefied Petroleum Gas (LPG) – this top-line growth was completely overshadowed by a 686% surge in net losses, which reached Tk16.98 crore for the quarter.
The company attributed this massive spike in quarterly losses to skyrocketing interest expenses tied to its mounting debt.
In its price-sensitive disclosure, the management explained that the poor performance was fuelled by constraints in opening new Letters of Credit (LCs) following a recently completed loan rescheduling process.
Furthermore, the company struggled with high fixed factory overheads and administrative expenses that could not be scaled down in proportion to the declining revenue. Significant finance charges, triggered by a sharp hike in interest rates, also played a central role in pushing the earnings per share into the negative.
Consequently, the net asset value (NAV) per share dropped by 23% to Tk25.21 by the end of March.
To navigate this liquidity crunch, Energypac has secured a 10-year restructured financing facility from the Bangladesh Bank, which includes a two-year moratorium on principal repayments. Management expects this move to stabilise cash flows and reduce immediate debt-servicing pressure.
Currently, the company's total term loan burden stands at Tk1,510 crore, with Mercantile Bank, Bank Asia, and Eastern Bank as its major lenders.
To meet its immediate operational and liquidity needs, the board has also resorted to asset liquidation, recently approving the sale of 16.50 decimals of land in the Tejgaon Industrial Area to a sister concern for approximately Tk33 crore. This follows an earlier sale of 597 decimals of land for Tk19 crore, as the company seeks to rebuild its retained earnings and stabilise its balance sheet over the long term.
