Systems loss facility withdrawal eats Titas Gas profits

Titas Gas Transmission and Distribution Company Ltd – a publicly traded state-owned firm – reported a 62% year-on-year decline in its profit in the first half of 2023-24 fiscal.

However, it has reported a notable growth by 82% to Tk17,184 crore in revenue – generated from gas sales – owing to the hiking of gas price in the last year.

In January 2023, the government hiked gas prices for power, industries, and commercial [hotel and restaurant] sectors up to 179%.

Also, Titas' operational income generated from meter rent, connection charges, late payment penalties, demand charge and penalties for illegal connections increased by 50% to Tk605 crore. 

Despite such a growth in revenue, the company's net profit declined to Tk46.82 crore during July to December 2023, down from Tk124.91 crore in the corresponding period of 2022.

Talking to The Business Standard, Arpana Islam, general manager (Finance) at Titas Gas, attributed the profit decline to two factors – the government's decision to withdraw the 2% systems loss facility and the increase in operating expenses. 

"Titas Gas enjoyed 2% systems loss facility over revenue, but lifting the facility, now systems loss is counted on the actual basis. That is why its profit declined," she said.

As the facility was withdrawn, the company's gross profit fell by 44%, and operating loss stood at Tk120 crore.

While riding on its non-operating income by Tk189 crore – basically investment and financial income from the fixed deposits – it managed to be profitable finally.

Titas Gas to issue preference shares to government 

Titas Gas has decided to issue irredeemable non-cumulative preference shares to the government against share money deposits worth Tk282.75 crore.

To secure shareholders' approval in this regard, the company called an extra-ordinary general meeting on 20 March through the digital platform