Power Grid Company scores big profit jump in Q3

The Power Grid Company of Bangladesh is experiencing consistent growth in its quarterly profits, driven by rising revenue and favourable foreign exchange rates.

In the third quarter (January-March) of the ongoing fiscal year, the company's after-tax profit soared to Tk217 crore, a remarkable upturn from Tk82 crore in Q2 and a turnaround from the Tk101 crore loss in Q1, according to its financial report released on Thursday.

In Q3, the company saw a 13% increase in revenue, rising from Tk540 crore to Tk612 crore compared to the same period last year. Its earnings per share surged to Tk2.37 in Q3 from a loss of Tk0.56 during the same period last fiscal.

This revenue growth was bolstered by a foreign exchange gain of Tk193 crore recorded in the third quarter, significantly contributing to the company's overall profit.

Jahangir Azad, the company secretary of Power Grid, the company strategically secured loans in various currencies from different international financial organizations. During the third quarter, foreign exchange rate volatility decreased, especially with a stable dollar rate and a drop in the Euro rate.

He noted that forex rates gradually declined from July to March of this fiscal year, resulting in significant savings for the company as it had to pay less against these currencies.

In the 2022-23 fiscal year, the country's sole state-owned power transmission firm suffered a record loss of Tk1,274 crore primarily attributable to severe fluctuations in foreign exchange rates.

From July to March of FY24, its profit after tax stood at Tk197.41 crore, which was a loss of Tk392 crore in the same period of FY23.

Among listed government firms, the Power Grid Company — a subsidiary of the Bangladesh Power Development Board (BPDB) — was earlier able to maintain consistency in profits as it enjoyed a monopoly in business.

Financials show Power Grid has taken loans from the Asian Development Bank, Swedish International Development Cooperation Agency, Danish International Development Agency, Nordic Development Fund, Japan International Cooperation Agency, HSBC, Islamic Development Bank, Exim Bank of India, and Asian Infrastructure Investment Bank. Out of this, loans from the ADB amount to Tk10,675 crore, which is the highest.

In February this year, the company got regulatory consent to issue 20.11 crore ordinary shares at Tk20 each, including a Tk10 premium on the face value. The total cost of the shares will be Tk402 crore.

The approved amount will augment the company's paid-up capital, and the newly issued shares will be incorporated into its existing pool of ordinary shares.

The government's sole power transmission company will issue 764.11 crore irredeemable and non-cumulative preference shares for Tk7,641 crore, with each share priced at Tk10. This sum will not be included in the paid-up capital; consequently, it will not impact the earnings per share.

As of 31 March 2024, the government held 75% of the shares, institutions held 17.97%, foreign investors held 0.01%, and general investors held 7.02% of the company.

The share price of Power Grid Company closed at Tk41.60 on the Dhaka stock exchange last Thursday.