Energypac’s net profit falls 50% in Q1 of FY21

The net profit of Energypac Power Generation Ltd, a newly listed company which will make its share trading debut today, dropped by 50% in the first quarter of the current fiscal year.

In that quarter, the company posted a net profit of Tk6.64 crore while earnings per share (EPS) was Tk0.44.

Considering initial public offering (IPO) shares, its EPS stands at Tk0.35, and net asset value per share Tk47.64.

Md Alauddin Shibly, company secretary at Energypac, said the company could not achieve the expected profit due to the coronavirus pandemic in the post-general holiday period.

"But we are very optimistic about recovery in the coming days."

Earlier, the company got the approval to raise Tk150 crore in capital by issuing shares through the IPO book building method.

Following institutional investors' bidding, the company secured the cut-off price of its primary shares at Tk35 each. But the general public got a 10% discount on the cut-off price, as suggested by the book building method of IPOs.

Energypac will invest the whole IPO fund mainly to expand its liquefied petroleum gas (LPG) business. It will spend a minor portion on repaying some expensive bank loans and paying the cost of the IPO process.

At the end of the fiscal year 2019-20, the company posted a consolidated revenue of Tk1,097 crore, which was 24% lower than the previous financial year.

However, its net profit grew by 21% to Tk58.18 crore and EPS stood at Tk3.83 in the last fiscal year.

Energypac has diversified its business through standby and base load generators, JAC brand automobiles, John Deere brand agro-based machinery, JCB brand construction machinery and material handling equipment, and operating CNG stations along with providing aftermarket services.

The company is also engaged in engineering, procurement and construction (EPC) contracts; operation and installation of CNG refuelling stations and conversion kits; and installation and maintenance of power plants.

It entered the LPG market under the G-Gas brand. Its LPG bottling and distribution plant is located near Mongla port.

The company further plans to assemble and manufacture ATS, canopies, LT panels, genset trailers, control panels, elevators, etc.

Energypac signed a $28 million contract with Sylhet Gas Fields Limited to build its condensate fractionation plant at Bahubal in Habiganj and to also avail associated facilities. Its share in the project is 52.40%.

The company also signed a Tk80 crore captive power plant project deal with Essential Drugs Company Limited.