CEB still deep in red despite sharp tariff hikes

17 May 2023 05:43 am - 11 - {{hitsCtrl.values.hits}}

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In spite of significant rise in revenues due to price hikes, records losses at top line due to sharp increase in cost of sales
Operating loss at Group level widens 12.1% but at Board level narrows 35.1% to Rs.19.2bn
Group level net loss at Rs.35.3bn, up 64%; Board level net loss at Rs.34.3bn, up 4.2%

Despite the sharp upward revisions in electricity tariffs, the financial performance of the Ceylon Electricity Board (CEB) remains dismal, the March quarter interim financial accounts of the State-run utility showed.

The electricity tariffs were hiked in August last year by an average of 75 percent and again in February this year by 65 percent to reflect the cost incurred by the utility in generating and distributing electricity to its customers.

However, despite these sharp increases, the power utility incurred massive losses at the top line level and even deeper losses at the bottom-line.

As per the interim financial accounts for the three months ended March 31, 2023, at Group level, CEB saw its revenue surging 71.1 percent year-on-year (YoY) to Rs.135.8 billion while the cost of sales rose 46.4 percent YoY to Rs.152.9 billion. This resulted in a gross loss of Rs.17 billion, which is a decrease of 31 percent YoY. At the Board level the gross loss narrowed by 31.5 percent YoY to Rs.20.8 billion.

However, as a result of sharp rise in other and administrative expenses, the operating loss of the CEB at the Group level widened to Rs.19.2 billion, up 12.1 percent YoY.

At the Board level, the operating loss narrowed 35.1 percent YoY to Rs.19.3 billion.

The massive jump in net finance cost to Rs.16.3 billion from Rs.3.7 billion a year ago, completely erased whatever the gains made at the top line, and as a result, CEB at the Group level recorded a net loss of Rs.35.5 billion in the March 2023 quarter compared to Rs.21.5 billion a year ago.

However, at the Board level, the net losses rose 4.2 percent YoY to Rs.34.3 billion. Meanwhile, CEB’s retained losses were recorded at Rs.546.5 billion as at March 31, 2023 compared to Rs.525.4 billion as at December 31, 2022.

During a recent press briefing, Janaka Ratnayake, the under-fire Chairman of the PUCSL, the country’s energy sector regulator, told media that the government might go for another round of tariff hike in light of CEB’s revenue falling below the target levels as a result of decline in consumption.

He pointed out that due to declining petroleum and coal prices in the world market, instead of another hike, CEB should at least reduce electricity prices by 25 percent.

Power and Energy Minister Kanchana Wijesekera this week said the CEB submitted its proposal to the PUCSL to revise electricity tariffs on July 1 according to the government’s policy decision and tariff filing requirement to adjust the tariffs on January 1 and July 1.

Meanwhile, during a press briefing on Monday, the International Monetary Fund (IMF) Resident Representative in Sri Lanka, Sarwat Jahan confirmed that the cost recovery measures on both electricity and fuel pricing are expected to be continued throughout the four-year IMF programme.

Comments - 11

Just do it Wednesday, 17 May 2023 06:24 AM

Privatise.

Dee Wednesday, 17 May 2023 06:35 AM

When a semi skilled person earns more than what a manager does in the private sector- what more to say!

Reformist Wednesday, 17 May 2023 06:56 AM

The biggest expense for these institutions is the salary costs. Over 85% of the costs go for staff salaries and these institutions are heavily over staffed and are highly unionised. If SL has any hope of reviving the economy and becoming a developed country, this aspect needs a massive fix. Equally, these institutions are filled with unskilled non contributing people who demand better conditions for work without giving anything in return. This has been a huge issue. Add to that, useless incompetent politicians keep filling these institutions with their cronies and supporters giving them plump jobs. Where to from here?

Citizen k Wednesday, 17 May 2023 09:00 AM

I agree totally ,A common sentiment of the people.

Dunderhead Wednesday, 17 May 2023 10:00 AM

Dear Reformist, You are spot on. Cannot agree more.

sam Wednesday, 17 May 2023 08:46 AM

Increasing tariff is not the answer to mismanagement and inexperience

MOIZ Wednesday, 17 May 2023 09:44 AM

Don't do anything harsh to CEB and its human resources. They are superhumans. Their Engineers are extraordinary and one of a kind in the world and so far not a single university in the world discovered any curriculum to match their brains. Even the meter from the CEB is superior and can run a blue chip company on his own. So to save such a vulnerable mankind we will come forward. Please increase the tariffs again at least by ten folds. We can pay. every household has a minimum of 6 kidneys and 2-4 testicles. We can sell those to make these superhuman species at CEB live happily forever. Thank you

SL Wednesday, 17 May 2023 12:28 PM

Oh man Reduce the staff,you are terribly less efficient compared to the salaries you take

down under Thursday, 18 May 2023 04:50 AM

It's not only being overstaffed but there are still a lot of corruption as well particularly with power buy agreements with private power generators.. Corruption is one main reason too.

Nightowl Thursday, 18 May 2023 09:54 AM

These financials were prior to the tariff hike. next quarter status will be much different with reduced thermal cost

Wait, current PUCSL chairman will claim CEB is faking again Friday, 19 May 2023 05:59 AM

The snake oil merchant who's current PUCSL chairman, will soon come up with alternative figures showing the CEB is deceiving with their figures, and they greatly profitable.

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CEB still deep in red despite sharp tariff hikes

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