Sri Lanka’s LVL Energy profits down on Bangladesh power plant costs
ECONOMYNEXT- Sri Lanka’s LVL Energy Fund Plc’s (LVEF) profits fell 52.95 percent to 22.60 million rupees in the December quarter from a year earlier as interest costs rose for investments in a thermal power plant in Bangladesh, interim financials showed.
The firm posted 4 cents in earnings per share for the quarter. The LVEF stock closed 10 cents up at 7.20 rupees a share on Friday. LVEF earned 52 cents per share in the first nine months of 2020 on profits of 304.54 million rupees, down 36.97 percent from 2019.
Group revenue from subsidiaries in the December quarter grew 60.8 percent to 150.38 million rupees from a year earlier, while interest income fell 83.72 percent to 3.18 million rupees.
Operating profits were 108 million rupees, up 39.73 percent.
Finance costs grew 125.60 percent to 81.44 million rupees.
LVEF Chief Executive Sumith Arangala said debt financing for a new thermal power plant in Bangladesh caused interest costs to rise.
“The said power plant commenced commercial operation on November 24, 2019 enabling us to account for share of profit from the entity from then onwards, thereby mitigating to some extent the effect of increased borrowings on the bottom line,” he said.
The 114 megawatt thermal power plant in the Feni District in Chittagong was built at an investment of 8 million US dollars.
Group borrowings at end-December grew to 2.25 billion rupees from 467.69 million rupees nine months earlier.
LVEF has plans to convert the debt to equity in the future, if market conditions improve, the firm had said in its last annual report.
LVEF is also building a 10 megawatt hydro power plant in Nepal to be commissioned in the 2021 financial year. (Colombo/Jan31/2020)