State-owned utility provider Ceylon Electricity Board (CEB) managed to report a profit for the three months ending December 2024, despite a sharp drop in revenue following two tariff cuts. However, a sharp drop in finance costs led to an increase in costs. The company reported a net profit of Rs 1.86 billion for the quarter compared to Rs 80.02 billion in the same period a year ago. CEB reported a revenue of Rs 113.25 billion for the October-December quarter of 2024, 35 percent lower than the Rs 174.00 billion reported in the same period a year ago.
The two-time electricity tariff cut in 2024 could be the reason for the decline in revenue. Direct expenses were reported at Rs 115.76 billion, up 36 percent, with a gross profit loss of Rs 2.51 billion. This is compared to a huge gross profit of Rs 88.93 billion reported in the same period a year ago.
On an operational level, the CEB reported a profit of Rs 28.27 million, down sharply from Rs 100.38 million a year ago.
This was due to a sharp decline in other income and profits from Rs 21.71 billion to Rs 12.31 billion in the most recent quarter, while administrative and other expenses fell by 17 percent to Rs 11.13 billion.
The company’s net finance expenses turned into net finance income during the quarter.
For example, the company reported a net finance income of Rs 100 million. This compares to a massive net finance cost of Rs 4.12 billion allocated during the same period last year. This could come from the current extremely low interest rates, which means that the CEB has less money to pay down debt compared to the debt it had a year ago. Meanwhile, the CEB earned a profit of Rs 150.51 billion for the year, a sharp increase from Rs 63.89 billion in the financial year ended 2023. This is on a revenue of Rs 569.04 billion, which is 16.0 percent lower than in 2023.
In January this year, the CEB reduced fees by an average of 20 percent for the third time. The March quarter results reflect the impact of the recent tariff revision and the impact on costs from the ongoing dry weather conditions.
