This dramatic turnaround in corporate earnings and Earnings Per Share (EPS) is primarily credited to optimal river water flow and a significant drop in bank financing costs.
Top Performers: Who Earned the Most?
While the overall sector grew steadily, a few standout companies drove the majority of the profit surge. Out of all hydropower companies, Sahas Energy has secured the top position as the highest net profit earner, posting Rs 1.18 billion (a 41.78% increase from Rs 834.1 million of review period of the last year). Sahas also leads the industry with a dominant EPS of Rs 34.48. Similarly, Api Power took the second spot with a staggering 86.29% surge in net profit, bringing in Rs 658.5 million and Mountain Energy maintained robust performance, securing a net profit of Rs 527.6 million.
In terms of growth, Buddha Bhumi Nepal Hydropower registered a jaw-dropping, miraculous leap of 4,053.30%. Its net profit skyrocketed from a meager Rs 0.562 million last year to Rs 23.3 million this quarter.
Key Catalysts Behind the Profit Surge
Industry insiders and financial data point to four main pillars driving this fiscal growth.
- Falling Interest Rates: In previous years, double-digit bank interest rates ate heavily into revenues. Thanks to high liquidity in the banking system, interest rates dropped to single digits, drastically reducing debt management costs.
- Favorable Weather & Water Flow: An extended active monsoon coupled with stronger-than-usual winter river flows allowed Run-of-River (RoR) projects to generate electricity at maximum capacity, automatically boosting sales to the Nepal Electricity Authority (NEA) via Power Purchase Agreements (PPAs).
- Deleveraging (Debt Reduction): Older, mature companies have successfully paid down their core principal debt over the years, naturally lowering interest burdens.
- Government Tax Royalty Exemptions: Newer projects benefited heavily from initial-year government royalty exemptions, keeping operational expenses remarkably low.
The Dark Side: Major Projects Plunge into the Red
Despite the industry-wide celebration, the average growth rate of the sector was heavily dragged down by disappointing losses from a few massive, highly anticipated projects. Rasuwagadhi Hydropower logged net loss of Rs 1.23 billion. The loss increased by 748.89 percent while it recorded LPS of Rs 24.16. Similarly, Upper Tamakoshi Hydropower logged net loss of Rs 286.7 million.
