The company is yet to announce how much increase it expects in net profit
The Dhaka Electric Supply Company Ltd, commonly known as Desco, will make more money because both the price of electricity and the demand charge at consumer level have been raised.
On Thursday last, the Bangladesh Energy Regulatory Commission (BERC) increased the retail price of power by 5.3 percent. The cost of power transmission, or wheeling charge, also goes up by 5.3 percent with the move.
However, the BERC made no change to Desco's distribution charge, which is Tk0.76 per unit.
"Our revenue will go up even though Desco's distribution charge is unchanged," says Desco's General Manager (Finance & Accounts) Md Mominul Islam.
However, the power supply company is yet to announce how much increase it expects in net profit. "We are currently estimating the amount," said Mominul.
Power distribution company Desco buys electricity from the Bangladesh Power Development Board and distributes it to consumers.
After the recent BERC price hike, the power supply company will sell power at Tk8.07 per unit from March 1.
For the low-voltage category, the BERC raised Desco's demand charges for residential areas from Tk25 to Tk30. The charges also go up for small industries, construction sites, educational institutions, religious and charitable organisations, street lamps, water pumps and battery charging stations and commercial spaces and offices.
The demand charges for customer categories and slabs under medium, high and extra-high voltages were also raised.
"Use of electricity is on a gradual rise. If your sale increases, profit also goes up," a top official of the distribution company told The Business Standard, preferring anonymity.
The official said BERC's power price hike will not hurt Desco, it will increase the supply company's profits instead.
Desco is a public limited company which supplies electricity to the northern parts of Dhaka and to Tongi Town in Gazipur District. The company sold a total of 5,205 million units of electricity for Tk3,986 crore in the 2018-19 financial year.
Desco posted a profit of Tk110 crore in that financial year.
Desco was listed at the stock exchanges in 2006 with a paid-up capital of Tk398 crore. The government holds 67.63 percent share of the company while institutional investors, foreign investors and general investors have 23.67, 0.25 and 8.45 percent shares respectively.
The company gave 12 percent cash dividend to its shareholders in the last financial year.
In the first half of this financial year, the company's revenue stood at Tk2,278 crore while the company posted a net profit of Tk82 crore during the period.
The company's share price was Tk38.30 at the Dhaka Stock Exchange on Sunday. Desco shares reached the highest value of Tk50.30 in the last one year.