Vidullanka 1Q earnings down 12% amid higher finance cost

Vidullanka PLC recorded a profit after tax of Rs.210 million for the first quarter of the financial year 2022/23, down 12 percent from a year ago. The group recorded a revenue of Rs.775 million for the period in consideration, a 28 percent increase from the first quarter period of the year 2021/22. 

The group said the decrease in profits has materialised as a result of the cost escalations Sri Lanka is currently facing, of which the noteworthy increase in the finance costs incurred for the period. 
The group saw its finance cost rising by 49 percent year-on-year to Rs.111.9 million during the period under review. 

However, due to the group’s stable overseas asset position, the three-month period recorded Rs.748 million in exchange translation gains, increasing the total comprehensive income of the organisation to Rs.966 million, recording a 268 percent YoY.  The overseas hydro operations of Vidullanka PLC continues to be the best performer of the group, bringing in a profit of Rs.253 million out of Rs.547 million in revenue for the quarter ended on June 30, 2022.

The profit recorded has increased by 92 percent in contrast to the same quarter of the year before. The overseas revenue also grew by around 76 percent comparatively from Rs.310 million. The foreign operations of the company include Bukinda SHPP and Muvumbe SHPP located in Uganda. 

The gross profit generated from local hydropower diminished from a profit figure of Rs.130 million and the revenue decreased to Rs.185 million, from Rs.246 million recorded for the comparative period of the previous year. The dendro and plantation arm of the group reported a net loss of Rs.41 million for the
same period. 

The group has active engagements in terms of several projects in the development pipeline, of which the most notable is Bwengu, the 50MWac ground-mounted solar power project in Malawi, which is being developed by Quantel Renewable Energy, a joint venture between Vidullanka PLC and Frontier Energy, Denmark. The construction of this project is expected to commence in 4Q of 2022. 

Locally, the group is proceeding with construction activities of the Horana Solar (2MW) and Vavunathivu Solar (10MW) ground-mounted power plants as well. With the cost escalations having a considerable impact on the development of these projects, the company is considering multiple feasible options, including increasing its equity infusions to meet its obligations. The commissioning of these two plants is expected to take place in late 2022.