CEB cuts March quarter losses; but accumulated losses top Rs.176bn

The Ceylon Electricity Board (CEB) cut losses during the three months ended in March 2021 as the State-run utility generated higher revenues from sale of electricity, while generation costs slipped.

Filing first quarter interim financial statements with the Colombo Stock Exchange, CEB said it reported a loss of Rs.8.9 billion for the January-March quarter, compared to Rs.17.6 billion in the same three months in 2020, logging 49.3 percent decline in losses between the two periods. The revenue for the period was 6.1 percent higher at Rs.59.7 billion from a year ago period as demand for power increased in tandem with accelerated economic activity after the second wave of COVID-19.

During the three months under review businesses saw bustling consumer activity around the clock while factories added capacity and worked extra hours to build stocks ahead of festive season. 

Meanwhile, the cost of sales fell by 8.02 percent to Rs.66.2 billion, reflecting a decline in the cost of power, which consists of both generated and purchased power from independent power producers. 

CEB on April 8 raised Rs.20 billion in a blockbuster listed bond issuance at 9.35 percent for five years, and the company said the funds would be utilised to settle the outstanding to independent power producers and the Ceylon Petroleum Corporation. 

By the end of March 31, 2021, CEB had Rs.194.4 billion in trade and other payables, up from Rs.185.2 billion in December 2020. Receivables from customers were only a fraction of that at Rs.64.5 billion. 

Besides, CEB also has Rs.346.9 billion worth of long-term loans and Rs.36.6 billion worth of short-term loans by the end of March 31, 2021. Its debt/equity ratio rose to 1.51 from 1.41 during the three months as the company borrowed more. 

Deposits from consumers were at Rs.15.9 billion, as at March 31, 2021. 

The utility had Rs.2.8 billion in net finance cost for the three months, up 11 percent from the same period in 2020. 
With the March quarter losses, CEB had accumulated losses of a massive Rs.176.6 billion.

While there is debate over whether the State utility must be run like a profit making private entity, the mandated interim reports and other disclosures that are required under the listing rules of the CSE will put the CEB under constant public scrutiny, possibly making a positive impact on its financial position.