Track the performance of Hydropower companies by the end of the second quarter on the basis of major financial indicators

Nepal has very few natural resources, one of them being availability of water bodies in abundance. To make optimal use of the resource, hydropower companies use these water bodies to generate electricity. They then sell the generated electricity to the Nepal Electricity Authority (NEA) at a pre-determined price. The hydropower sector of the country has great potential, but the companies have not yet been able to harness decent benefits from the resources.

To track the performance of listed hydropower companies, the major indicators from the second quarter report for FY 2076/77 has been compared. There are currently 32 listed hydropower companies in the Nepalese stock market, out of them only 28 have published the second quarter for FY 76/77.

The companies that have not published the Q2 report are Ghalemdi Hydropower Limited (GHL), Himalayan Power Partner Limited (HPPL), Joshi Hydropower Company Limited (JOSHI) and Panchakanya Mai Hydropower Limited (PMHPL).

The indicators that have been considered are paid up capital, reserves, investments, long term loans, revenue from sale of electricity, net profits, net worth per share and quarter-end earnings per share.

Paid up Capital and Reserves

In terms of paid up capital, Upper Tamakoshi Hydropower (UPPER) stood ahead with massive capital of Rs.10.59 Arba. The company currently has negative reserves of Rs.66.21 Crore. Barun Hydropower Company (BARUN) has the lowest paid up capital at Rs.25.51 Crore and reserves of Rs.3.24 Crore.

Twelve companies have posted negative reserves by the end of the second quarter. UPPER has the highest negative reserve while Butwal Power Company (BPCL) has the highest positive reserves at Rs.4.29 Crore. The paid up capital of BPCL stands at Rs.2.68 Arba.

Long-Term Loans

UPPER stood ahead in terms of loans with highest loan of Rs.55.38 Arba which includes interest on loans. Arun Valley Hydropower (AHPC) is the only company with no long term borrowings. Only two companies have loans below Rs.10 Crore (National Hydro and Chilime Hydro) while twelve companies including UPPER have loans more than Rs.1 Arba.

Investments

While Chilime Hydropower (CHCL) has the highest investment of Rs.5.94 Arba followed by Sanima Mai Hydropower (SHPC) with Rs.1.14 Arba, eleven companies have not made any investments. The two mentioned companies are the only ones with investment more than Rs.1 Arba. Kalika Power Company (KPCL) has the lowest investment worth Rs.20 Thousand.

Revenue from Electricity Sale

CHCL leads the industry with highest revenuer form sale of electricity worth Rs.61.86 Crore, however it is a fall of 0.90% compared to the corresponding quarter of the previous year. The lowest revenue was posted by Rairang Hydropower (RRHP) worth Rs.47.47 Lakhs, which grew by 184.69% compared to the previous year’s corresponding quarter. Only five companies have not started commercial sale of electricity, they are Himalaya Urja Bikas Company (HURJA), Rasuwagadhi Hydropower (RHPL), Sanjen Jalavidhyut (SJCL), Universal Power (UPCL) and UPPER.

Net Profits

BPCL has posted the highest profit by the end of the second quarter at Rs.85.88 Crore, which grew by 13.27% compared to the corresponding quarter of the previous year. Only three companies managed to report net profit above Rs.10 Crore including BPCL, they were CHCL and SHPC with net profit of Rs.38.66 Crore and Rs.28.79 Crore respectively. Seven companies reported a loss by the end of the second quarter. The highest loss was posted by Khani Khola Hydropower (KKHC) at Rs.6.68 Crore which is 6.76% less than previous year’s loss of Rs.7.17 Crore.

Panchthar Power Company (PPCL) and HURJA has posted a loss in the corresponding quarter of the previous year but managed to post profit by the end of the second quarter of the previous year. Similarly, Ankhukhola Hydropower (AKJCL) had a profit of Rs.20.09 Lakhs in the same quarter of the previous year but had posted a net loss of Rs.91.54 Lakhs in the review period, losing massive 555%.

Net worth per Share and Quarter-End EPS

Due to the seasonal nature of the business of hydropower companies, the EPS has been calculated on the basis of the second quarter reports and have not been annualized. BPCL leads in both the aspects with net worth per share at Rs.260.21 and EPS at Rs.32 by the end of the second quarter. Only three companies were able to report quarter end EPS higher than Rs.10, they were BPCL, SHPC and NHDL.

Seven companies posted negative EPS. The lowest EPS was reported by KKHC at negative Rs.14.36 and was the only company in the sector to post negative net worth per share of Rs.7.57. Including KKHC, 12 companies have reported net worth below Rs.100 by the end of the second quarter of FY 76/77.