Sri Lanka’s Vidullanka reports Rs. 218 million Profit After Tax for 1Q.
Daily FT: Vidullanka PLC has recorded a Profit After Tax of Rs. 218 million for the first quarter of the financial year 2022/23.
The company recorded a revenue of Rs. 775 million for the period in consideration, a 28% increase from the 1st quarter period of the year 2021/22. The recorded profit has decreased by 10% compared to the profit figure of the same quarter of the previous year.
This decrease in profits has materialised as a result of the cost escalations Sri Lanka is currently facing of which the noteworthy increase in the finance costs incurred for the period.
However, due to the group’s stable overseas assets position, the three-month period recorded Rs. 748 million in exchange translation gains, increasing the Total Comprehensive Income of the organisation to Rs. 966 million, a remarkable 268% increase from the comparative period of the previous year.
The overseas hydro operations of Vidullanka PLC continues to be the best performer of the group, bringing in a profit of Rs. 253 million out of Rs. 547 million in revenue for the quarter ended 30 June. The profit recorded has increased by 92% in contrast to the same quarter of the year before. The overseas revenue also grew by around 76% comparatively from Rs. 310 million. The foreign operations of the company include the Bukinda SHPP and Muvumbe SHPP located in Uganda.
The gross profit generated from local hydro power diminished from a profit figure of Rs. 130 million and the revenue decreased to Rs. 185 million from Rs. 246 million recorded for the comparative period of the previous year. The dendro and plantation arm of the group reported a net loss of Rs. 41 million for the same period.
The group has active engagements in terms of several projects in the development pipeline, of which the most notable is the Bwengu, 50MWac Ground-Mounted Solar Power Project in Malawi which is being developed by Quantel Renewable Energy, a joint venture between Vidullanka PLC and Frontier Energy, Denmark. The construction of this project is expected to commence in Q4 of 2022.
Locally, the group is proceeding with construction activities of Horana Solar (2MW) and Vavunathivu Solar (10MW) ground-mounted power plants as well. With the cost escalations having a considerable impact on the development of these projects, the company is considering multiple feasible options including increasing its equity infusions to meet its obligations. The commissioning of these two plants is expected to take place in late 2022. Vidullanka PLC, a name synonymous as a pioneer and change agent with the renewable energy industry of Sri Lanka, continues its unwavering growth and expansion, domestically and across borders. Even in these trying times, the future setting of the company as well as the industry seems to be promising due the growing emphasis directed towards alternative energy sources locally and globally. The company stands steadfast and ever ready to capitalize on the opportunities emerging in the renewable energy industry.
OSL take:
Sri Lanka’s power industry has become a hotbed for business/investment opportunities in the country amidst the ongoing power crisis in the country. The need to increase the electricity generation capacity in the country and the search for alternative power generation sources given the ongoing fuel crisis have opened up new business/investment opportunities in Sri Lanka. The renewable energy generation sector is one of the key areas that has shown great business/investment potential. The expanding economic activities have further increased the demand for electricity. Local businesses that are engaged in the power sector, including renewable energy generation, have recorded impressive growth rates as well as profits. Foreign businesses/investors could therefore explore the growing opportunities in Sri Lanka’s power industry, especially in the renewable energy generation sector.
| Article Code : | VBS/AT/21092022/X_7 |