Summit Power Limited has proposed 35% cash dividends for the 2020-21 fiscal year as the listed independent power producer along with its subsidiary plants earned Tk5.25 in net profits against each share.
The company's earnings per share (EPS) was Tk5.17 for the previous fiscal year.
At the end of June this year, Summit Power posted Tk34.55 in net asset value per share, which was Tk31.5 a year ago.
As the private sector power producers secure a fixed rate from the government against their power supply to the national grid, the companies concerned did not suffer earnings disruption despite the volatile demand during the series of lockdowns in the pandemic.
If a power plant having a contract with the government remains idle due to no demand, the company concerned gets a capacity charge from the government which helps them stay afloat.
However, the private sector power producers like Summit have one concern—tenure of the power purchase agreement between the companies and the Bangladesh Power Development Board (BPDB), or Bangladesh Rural Electrification Board (Breb).
With the tenure expired, companies lose their source of income and are forced to sell their plants off for some one-off gains if the government does not renew the power purchase contract.
At present, Summit Power is operating 15 power plants in various areas of the country with a total installed capacity of 975.96 MW.
Summit informed its shareholders that the tenure of the contract for its Madanganj Power Plant with 102 MW capacity expired at the end of March this year and the operation at this plant has been suspended.
A proposal for extension of the power purchase agreement for this plant is under consideration of the government under 'no-electricity, no-payment' basis, the company said.
Private sector power producers having plants to expire soon suffered a stock price fall over the recent years. However, the stock price recovered recently as soon as the government moved to allow rental power plants to continue for an extended period.
Summit Power shares closed at Tk46.7 in the Dhaka Stock Exchange on Monday, 0.43% up from the previous day.