Loss to profit: Power Grid turnaround drives 13% surge in share price
Owing to failure to declare dividends for the two consecutive years, DSE downgraded its shares to Z category
After suffering losses of over Tk1,000 crore for three consecutive fiscal years, Power Grid Bangladesh PLC – the state-owned power transmission firm – has witnessed a remarkable turnaround, returning to profit in the first quarter of the current fiscal year.
Beating a Tk256.54 crore loss in the July-September quarter of the previous fiscal year 2024-25, the state-owned power transmission company posted a whopping Tk363.53 crore profit in the first quarter of the current FY26.
With hopes of a turnaround after years of losses, Power Grid's share price hit the upper circuit today (10 November), soaring over 13% as investors became active on the buying side, according to Dhaka Stock Exchange (DSE) data.
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After the conclusion of trades, the DSE downgraded the shares of today's top gainer, Power Grid, to the Z category as it consecutively failed to recommend dividend for its shareholders.
Of the three consecutive years of losses, it had paid a 10% cash dividend to its shareholders in FY23 despite incurring a loss of Tk626 crore, as its retained earnings were positive.
But for the two consecutive years in FY24 and FY25, it failed to declare any dividend for its shareholders.
In the three fiscal years, it had incurred a loss of Tk1,294 crore.
Citing the costly dollar as the main reason behind the previous losses, Md Jahangir Azad, company secretary of Power Grid, told The Business Standard, "Power Grid availed foreign loans that have to be repaid in foreign currency, mostly in US dollars. Due to the sharp appreciation of the dollar, the company incurred huge losses while repaying those loans."
He added, "Now, foreign currency rates have remained stable, which has had a positive impact on the company's earnings. From currency fluctuations alone, Power Grid gained around Tk194 crore as the value of the dollar and other foreign currencies declined."
FY25 financials and no dividend
As per its audited statement for FY25, Power Grid's revenue – transmission and optical fibre charges – increased to Tk3,099 crore, up from Tk2,785.77 crore in FY24.
In FY25, its loss significantly narrowed over the previous to Tk210.62 crore with per share loss of Tk2.30.
Its financial statement showed that its finance expenses declined 8% to Tk1,666 crore, and due to foreign currency exchange rate fluctuation, it incurred a loss of Tk934 crore.
In the previous year, it had incurred a loss of Tk611 crore and its foreign currency rate fluctuation loss was Tk1,098 crore and finance expenses were Tk1,818 crore, the report showed.
Due to the losses, Power Grid in FY25, did not recommend any dividend for its shareholders.
Owing to the failure to declare dividend, the DSE downgraded the firm to the Z category, and the DSE requested stock brokers and merchant bankers to abstain from providing loan facilities to purchase stock of Power Grid from 11 November.
Turnaround in Q1
With the incurring losses for years since FY23, the Power Grid again tasted profit in the first quarter (Q1) of the current fiscal year.
During the July to September quarter, its total revenue increased to Tk930.83 crore, which was Tk847 crore in the same time of FY25.
At the end of the quarter, it made a profit of Tk363.53 crore with an earnings per share (EPS) of Tk3.98, which has loss of Tk25.54 crore and per share loss of Tk2.81 in the same time of the previous fiscal year.
As of 30 September, Power Grid has Tk2,249 crore investment in term deposits. It has over Tk61,073 crore as term loans from foreign lenders – ADB, SIDA, JICA, IDB, EXIM Bank India, AIIB and others.
Regarding the increase in EPS, a disclosure today said that due to the total income of the company increased by Tk97.35 crore and the total expenses decreased by Tk522.72 crore.
While asking Jahangir Azad, during the Q1, revenue from transmission of the company increased compared to the same time of the previous fiscal year, also finance income—FDRs, and investment in treasury bonds increased, which resulted returning to profit.
He also said, "We incurred a loss due to the pricy dollar, now the company gained from the currency fluctuation as the currency price declined.
