Strong dollar hits Power Grid hard again

Infograph: TBS

Power Grid Company of Bangladesh Limited, after seeing record losses in the October to December quarter of the fiscal 2022-23, has incurred a loss in the January to March quarter as well, owing it once again to the appreciation of the US dollar against the taka.  

Although the company posted higher year-on-year revenue and operating profit in the March quarter of FY23, its higher foreign debt servicing cost is what dragged the company to quarterly losses.

According to the company's latest financial statement, its net loss stood at Tk50.86 crore in the January to March quarter of FY23, which was a net profit of Tk83 crore in the same quarter of FY22.

In the October to December quarter of FY23, the company turned a record loss of Tk392.71 crore.

The company's foreign exchange loss in the March quarter was Tk182 crore, which was Tk576 crore in the December quarter. Because the foreign exchange loss was significantly lower in the latest quarter, the company's net loss was also lower compared to the previous quarter.

In the July to March period of FY23, the company's foreign exchange loss stood at Tk911 crore.

Power Grid's Company Secretary Md Jahangir Azad earlier told The Business Standard, "Over the years, Power Grid has taken multiple foreign loans from Bangladesh's development partners for capital expenditure."

"According to the current exchange rate of the taka against the dollar, the loan amount is much higher than what it was last year. As a result, there has been a huge loss due to fluctuations in foreign currency exchange rates," he further said.

Power Grid Company of Bangladesh, which is a subsidiary of the Bangladesh Power Development Board (BPDB), has been making decent profits since the fiscal 2014-15. In the last 2021-22 fiscal, the company made a profit of Tk122.9 crore.

In the January to March quarter of this fiscal, the company's revenue increased by 5.37% to Tk540 crore, compared to the same quarter previous fiscal.

Its operating profit, which is calculated by deducting all the administrative expenses, was also higher in the FY23 March quarter, compared to the same quarter of FY22.

Its nine-month revenue in the July to March period of FY23 was also higher compared to the same period of FY22. It stood at Tk1,766 crore during the period, which was Tk1,674.05 crore a year ago.

But mainly because of the company's huge foreign exchange loss, which was even bigger than its revenue in the December quarter, its net loss in the nine-month period stood at Tk332 crore, against a net profit of Tk279 crore in the same period of the previous fiscal year. The loss per share stood at Tk4.66.

 As on 31 March 2023, the company's net asset value per share stood at Tk140.47.

The government has been funding the Power Grid from various development partners and the government's own funds with the aim of building the country's power transmission infrastructure.

The money paid to the company by the government was 60% equity and 40% debt. The BPDB owns 75% of the company.

Power Grid shares, having a face value of Tk10 apiece, were stuck at the floor price of Tk52.4 on the Dhaka Stock Exchange on Thursday.