Power Grid slips back into red in FY25 Q3

Infographics: TBS

Power Grid Bangladesh, the state-owned power transmission company, slipped back into the red in the third quarter (Jan–Mar) of this fiscal year, reversing its substantial second-quarter profit due to a sharp rise in finance costs and mounting foreign currency losses.

Following the return to losses, Power Grid topped the losers' list on Tuesday as its share price fell by 9.71%, closing at Tk31.6 per share.

After incurring over Tk200 crore in losses in the first quarter (July–September) of FY25, the company recovered in the second quarter with a Tk398 crore profit.

By the end of the first half of the current fiscal year, which ended in December, it returned to profit with a cumulative profit of Tk141 crore.

However, in the third quarter (January–March), Power Grid posted a Tk185 crore loss with per per-share loss of Tk2.03, dragging it back into negative territory.

As a result, after adjusting for earlier profits, the company ended the first nine months of the fiscal year with a net loss of Tk31 crore while its revenue during the period grew by 13% to Tk2,218 crore.

During the July–March period, Power Grid's finance expenses nearly doubled to Tk1,183 crore — comprising Tk539 crore in interest expenses and Tk644 crore in foreign currency fluctuation losses. In the same period of the previous fiscal year, total finance expenses stood at Tk614.83 crore.

Despite having gradual revenue growth, in the last two fiscal years — FY23 and FY24 — it incurred heavy losses due to foreign currency fluctuation to repay its foreign loans.

According to its financial statement, it has over Tk50,000 crore loans from Asian Development Bank (ADB), Japan International Cooperation Agency (Jica), Asian Infrastructure Investment Bank (AIIB), Swedish International Development Cooperation Agency (Sida), Exim Bank India and other lenders.

According to its unaudited financials for nine months, its revenue in the third quarter also grew by 13% to Tk692.45 crore, but its profit from operations declined by 7% due to an increase in its transmission expenses.

Meanwhile, it saw a sharp rise in its finance expenses for loans and foreign exchange rate fluctuation losses.

In Q3, its finance expenses were Tk554 crore while its currency fluctuation losses were Tk371.76 crore.

Regarding EPS declining, it said that the total income of the company has increased by Tk339 crore, and the total expenses increased by Tk568 crore.

The expense has increased more than the company's income, so that EPS decreased by Tk2.50 during the period in comparison to the reporting period of the last financial year.

In the last two consecutive fiscal years, Power Grid incurred heavy losses of over Tk1,000 crore, which pulled its retained earnings into negative.

Previously, due to its monopoly business nature, it posted continuous profits and paid handsome dividends to its shareholders every year.

But in FY24, it failed to pay a dividend to its shareholders.