Summit Power’s revenue jumps 108% in third quarter

The country's leading independent power producer Summit Power Limited recorded a 108% growth in revenue that reached Tk1,012.16 crore in the third quarter of this fiscal year.

During this period, its profit grew by only 9.67% to Tk145 crore as production and finance costs increased enormously. It posted a 208% higher production cost than the same period in the previous year.

The company runs five heavy fuel oil-based power plants and 10 gas-based plants. Heavy fuel oil and gas prices did not increase in the current fiscal year.

Summit Power did not comment on the production cost surges.

In the first nine months of this fiscal year, its revenue grew by 71% to Tk3,039.50 crore and net profit rose by 2% to Tk446 crore compared to the same period in the previous year.

Meanwhile, its share price rose by 5.65% to Tk44.90 each at the Dhaka Stock Exchange on Sunday.

In the last fiscal year, the company paid a 35% cash dividend – 15% interim and 20% final – to its shareholders despite its revenue falling by 21%.

Muhammed Aziz Khan, chairman of Summit Power, said at last year's annual general meeting 170 million people already have access to electricity in Bangladesh.

"But for us to provide uninterrupted, quality power supply to industries, we need to further develop our transmission and distribution networks. We urge the government to also privatise the transmission and distribution of electricity."

Summit Power, a part of Summit Group, has 1,941MW installed capacity and supplies electricity to the national grid. It received the best power plant award from the government five times since 2013.

Meanwhile, the 10-year agreement it signed with Bangladesh Power Development Board to sell power from its Narayanganj power plant unit 1 expired on 31 March.

The company said in its disclosure published on the websites of both stock exchanges that it had received a letter from the power development board. As per the letter, the 102MW Narayanganj unit was completely shut down on 1 April.

The disclosure also said the power development board had filed a petition with the Appellate Division of the Supreme Court in this regard.

The court ordered that "the contract between the parties shall be deemed to have been extended till all litigation is over."

The contracts of the company's two more power plants – 24.3MW Madhobdi power plant unit 2 and 13.5MW Chandina power plant unit 2 –will expire at the end of this year.

Aziz said in the 2019-20 annual report to shareholders that the 300MW Summit Gazipur II Power Limited, a new plant under construction, had secured $140 million from foreign commercial lenders in long-term, low-cost financing.

Of the company's total shares, sponsors and directors hold 63.21%, institutional investors 17.94%, foreign investors 3.65%, and general investors 15.20%.