Heavy rain showers profits on EDL-Gen: Stockbroker

Heavy rain showers profits on EDL-Gen: Stockbroker

EDL-Gen, a major Lao power provider, is likely to see solid earnings in 2011 after heavy rainfall last year, a stockbroker has announced.

Nam Ngum 1, one of EDL Gen's powerplants was able to generate more electricity thanks to heavy rain.

BCEL-KT announced this week that EDL-Gen, one of two companies listed on the Lao Securities Exchange, would make US$75 million net profit in 2011.

This is an increase on the earlier projection of US$55 million due to the heavy rainfall that occurred last year, enabling the hydropower company to boost electricity generation.

According to the broker, abnormally heavy rainfall created high water levels in reservoirs and heavy river flow, enabling EDL-Gen's hydropower plants to generate more electricity than normal.

EDL-Gen produced total electricity output of 2,130 million kWh, a 39 percent increase compared to the previous year.

This was the company's first major increase in power generation after a gradual decline in output since 2008.

The Nam Ngum 1 dam, one of six hydropower plants owned by EDL-Gen, played a significant role in driving electricity generation in 2011.

The 155MW Nam Ngum 1 power plant also had a major boost to output after the upstream Nam Ngum 2 dam, an independent power producer (IPP), released water into the Nam Ngum 1 reservoir after years of filling its own reservoir.

All of EDL-Gen's power plants except the Xelabam saw an increase in electricity output last year thanks to prolonged heavy rain.

BCEL-KT said ELD-Gen shareholders would receive earnings per share (EPS) in 2011 of US$0.09, up from US$0.05 in 2010, and a dividend of US$0.07 per share. The return on equity for shareholders was expected to be about 18.3 percent.

EDL-Gen postponed its decision to issue additional shares for current shareholders and new investors at the end of last year, saying that global economic conditions made it difficult to go ahead with its capital growth project to boost electricity production capacity.

BCEL-KT is optimistic about the growth of EDL-Gen in 2012, believing the company will take over two hydropower plant projects and purchase shares in four operating IPPs from EDL with a total power capacity of 707.8MW.

The next growth step will come from EDL's wholly-owned assets as well as equity shares of IPPs under construction and planned projects. Over the next two years, EDL-Gen's equity capacity is expected to grow significantly from 381MW in 2011 to 1,020 MW in 2013, the broker said.

vientiane times