LVL Energy Fund quarterly earnings up 84.5%

LVL Energy Fund PLC’s LVEF delivered strong growth in earnings for the quarter, an increase by 84.5% to Rs 130.9 million compared to Rs 70.9 million in 4QFY21.

Improved earnings are predominantly attributable to the notable growth in share of earnings from equity accounted investees which recorded a growth of 195.3%YoY to Rs 268.7 million stemmed from a combined effect of improvement in plant factors (power generation) in LVEF’s Bangladeshi thermal power plant operations and the steep depreciation witnessed in Rs against the BDT during the quarter (c. 48.0% in 4QFY22).

Accordingly, despite plant factors of ‘Rajshani’ and ‘Comila’ projects improved up to 74 % and 67 %, respectively and delivered exceptional results, the majority of the performance improvement during the quarter is derived as an effect of the exchange rate movement.

Furthermore, the hydropower project currently progressing in Nepal (10MW) is also predicted to commission by December 2021 thereby adding further boost to overseas earnings. Moreover, given the further depreciation in Rs against BDT subsequent to the quarter end (64.7% YTD), we expect to see the favourable forex effect in the coming quarters as well.

However, strong demand for power generation in Bangladesh, as they are underway to achieve 100% of people under electrification by 2023, leaves more opportunities for LVEF to sustain its high plant factor levels in the future.

Moreover, two solar projects with a total capacity of 5MW which were previously on the pipeline have been commissioned and the remaining 10MW hydro project in Nepal is also expected to begin operations in December 2022. Additionally, the existing wind plants were also fully operational from August 2021.