CEB cuts September losses after repeated tariff hikes
Revenues up 84% to Rs.154bn; operating profit at Rs.6.38bn compared to a loss of Rs.30.72bn a year ago
The Ceylon Electricity Board (CEB) narrowed its losses in the three months through September 2023 after two substantial tariff hikes since August last year, the interim financial accounts filed with the Colombo Stock Exchange showed. Notably this development comes ahead of the planned unbundling of the State monopoly under the proposed new Electricity Bill which is expected to go before the Cabinet today (20th). CEB reported revenues of Rs.153.56 billion from July through September, up 83.9 percent from the same period a year ago when the country was under months-long blackouts due to lack of foreign currency to bring down diesel and coal to generate sufficient power. The country was able to come out of the scheduled power cuts soon after it raised the tariffs for the second time in February this year after raising first in August last year. The 13-hour long daily power cuts last year combined with days long queues for fuel, gas and prolonged shortages of other essential commodities forced the enraged people to take to the streets for months forcing the then government and President Gotabaya Rajapaksa to resign. This worst economic crisis caused by the prolonged foreign currency shortage made the restructuring of the CEB among other State owned Enterprise reforms imminent in the agenda under the current International Monetary Fund programme. The institution is expected to be split into four separate units under the proposed new Electricity Bill which is expected to see the parliamentary passage by the end of January next year, if the government could overcome possible legal challenges and the opposition from trade unions. While the CEB owned hydro power plants would be run under 100 percent State ownership, its thermal plants and the renewable energy arms would be cleaved off into two separate entities. Furthermore, there will also be a separate transmission company. As per the interim results filed with the Colombo Stock Exchange, CEB reported a gross profit of Rs.3.64 billion for the three months turning from a loss of Rs.31.93 billion in the same period a year ago. At the operating level too, CEB made a profit of Rs.6.38 billion from a loss of Rs.30.72 billion a year ago. As a result the utility was able to narrow down its net losses to Rs.3.02 billion in the July – September quarter from Rs.44.31 billion in the corresponding period in 2022. These results do not reflect the most recent tariff revision which came into effect from late October. The thrice raised tariffs caused many households to cut down power usage significantly and many enterprises to close down their shops completely as they could not endure the multiple crises during the last four years. Assuaging concerns, the State Minister of Finance last week said the Value-added Tax (VAT) would not be applicable to electricity when they remove most of the exemptions from as early as next year.