Heavy rains bolster EDL-Gen's profit

Heavy rains bolster EDL-Gen's profit

EDL-Gen, one of the largest hydropower companies in Laos, has made a higher profit than expected over the third quarter of this year thanks to heavy monsoon rains.

The public company last week announced it made a net profit of 248,443 million kip in the third quarter of this year. This was higher than the 188,511 million kip profit earned in the first half thanks to an increase in the amount of hydropower generated following exceptionally heavy rains.

Revenue from sales in the third quarter reached 341,066 million kip compared with 308,175 million kip in the first half.

Because costs and operating expenses did not increase proportionately, the operating profit margin rose from 70.48 percent in the first half to 81.98 percent in the same quarter.

EDL-Gen made a net profit of about 437 billion kip from hydropower generation and sale over the first nine months of this year.

The after-tax profit is 19 percent higher than targeted for the period. Heavy rainfall resulted in more water flowing into dams and the generation of more hydropower.

EDL-Gen also announced expected net earnings of 580 billion kip in 2011, saying this would enable it to pay an appropriate dividend to shareholders for the second half of this year.

According to BCEL-KT, which provides underwriting services for EDL-Gen, earnings per share were 503 kip over the first nine months.

The broker said it would be possible for the power company to pay the full year dividend payment (before tax) of 600 kip this year.

EDL-Gen paid 160 kip per share to shareholders over the first six months of this year.

According to information from EDL-Gen, the annual meeting of shareholders on October 3 agreed to announce the sale of additional shares to current shareholders and new investors. This would help to generate the capital needed to acquire shares in four independent power projects, driving growth and boosting electricity generation capacity.

The company is now in the process of issuing the additional shares and expects to give domestic and foreign investors the opportunity to buy additional shares when the regional and world economic situation is more favourable.

EDL-Gen public split from the state-owned Electricite du Laos in 2010 in line with government policy to mobilise investment funding. The government sold 25 percent of its share in the enterprise to domestic and foreign investors, generating income of 913 billion kip.

The company said it had spent the earnings in accordance with the investment plans announced in its prospectus, including maintenance and business expansion.

The company is also improving its management towards greater transparency and worker responsibility. The company is audited regularly by shareholders.

vientiane times