Profit growth of hydro companies declines

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    profit_declineKATHMANDU: This year, investors cannot expect handsome dividends like in the last few years since hydropower companies could not record much growth in profit.

    Three among four listed hydropower firms have registered 12 per cent decline in profits in fourth quarter of last fiscal year in comparison to fourth quarter of previous fiscal, according to unaudited financial results of Arun Valley Hydropower (AHPC), Butwal Power Company (BPCL) and Chilime Hydropower Company (CHCL). National Hydropower Company (NHCL) — the fourth listed hydro company — last published its quarterly financials till third quarter of fiscal 2010-11.

    The three companies earned Rs 1.3 billion as net profit last fiscal year, while in the last quarter of fiscal year 2011-12 their profit stood at Rs 1.5 billion. AHPC earned Rs 67.2 million last year from Rs 9.8 million earned a year ago. Likewise, CHCL earned Rs 963 million in the review period while in fiscal year 2011-12 it had registered a profit of Rs 942 million. BPCL recorded a profit of Rs 286 million while a year ago it had earned Rs 561 million.

    Compared to the previous fiscal year, although AHPC’s profit has grown by more than five times, CHCL’s profit barely registered a gain of two per cent. On the other hand, BPCL’s profit declined by almost half in the last fiscal year. BPCL’s generation expenses increased in the last fiscal year in comparison to the previous year that ate into its profits.

    “There is high expectation regarding shares of hydropower companies in the market, in terms of returns and in terms of dividend as well,” said president of Nepal Investors’ Forum Raj Kumar Timilsina. This year, the hydropower index appreciated by five per cent. “AHCL has already announced 15 per cent cash dividend but it is unlikely that BPCL and CHCL will declare more dividends than that of last year.”

    These three companies had distributed attractive dividends from the previous fiscal year’s profit. CHCL was one of the highest dividend payers among listed companies with its 20 per cent cash dividend and 30 per cent stock dividend. Likewise, Butwal Power and Arun Valley distributed 25 per cent and 15.75 per cent cash dividend, respectively.

    Source : The Himalayan Times