DGPC and BT reported a record high profit in 2016
Taxes and dividends from Druk Holding and Investments (DHI) and its subsidiaries contributed more than 30 percent to the total domestic revenue of in the last fiscal year.
In addition to the Nu 5.97B paid in income tax, DHI and its group has remitted a dividend of Nu 3.78B to the finance ministry in 2016. A growth of 14 percent was realised in income tax payment compared to 2015.
At the DHI annual press conference yesterday, chief executive officer, Dasho Karma Yezer Raydi said that due to the solid financial performance of the companies, the net worth of the DHI and DHI owned companies combined has grown from Nu 76B to Nu 79B between 2015 and 2016. DHI and its companies earned a consolidated profit after tax of Nu 6.66B.
While consolidated income of the DHI group increased to Nu 43.38B, up by more than Nu 4B, expenditure also rose by Nu 2B. Dasho Karma Yezer Raydi attributed the increased income to realisation of more revenue from the energy sectors.
He also said that DHI and finance ministry agreed on a revised dividend payment modality last year, moving away from the earlier deal on a fixed sum to percentage of consolidated profit (63 percent). As a result, DHI will settle Nu 4.038B as dividend for the fiscal year 2017 in June this year.
“DHI does not create any revenue by itself, so its revenue is the dividend it receives from DHI linked, controlled and owned companies,” Dasho Karma Yezer Raydi said.
Financial statement of standalone DHI reveals a profit after tax of Nu 5.08B. This is attributed to the increased dividend from the Bhutan Power Corporation.
The Druk Green Power Corporation (DGPC), with a net worth of more than Nu 55B has recorded the highest generation of power and revenue in the history of hydropower. It earned a profit before tax of Nu 7.9B and paid Nu 2.399B in tax last year.
CEO Dasho Chhewang Rinzin said the late rainfall last autumn contributed to an additional three percent to power generation. It has remitted 90 percent of its profit after tax to DHI.
He said that heavy investment is being pumped into maintaining the old plants that have crossed 30 years and in solving teething problems.
The Bhutan Power Corporation (BPC) made a post tax profit of Nu 1.54B. While the company’s revenue from electricity grew by 4.6 percent to Nu 4.79B last year, it could not match the revenue growth of 14 percent it had made the previous year.
CEO Gem Tshering said the constant tariff during the period resulted in the decreased growth of revenue from electricity.
Having achieved electricity coverage of 99.5 percent, inaccessible worksites and difficulty in transportation has left out Lunana in Gasa Lingzhi in Thimphu and Jigmecholing in Sarpang from the on-grid electricity. Lunana comprise 0.13 percent of the un-electrified consumers.
Gem Tshering said that Korea initially agreed to finance grid connectivity to Lunana. However due to some internal glitch in Korea, it had to suspend all external fundings. He said that BPC is also exploring solar battery system to electrify Lunana.
With reduction in operation expenditure by 10 percent and 13 percent increase in revenue, Bhutan Telecom declared a record high profit after tax of Nu 868M last year.
Officiating CEO Karma Tshewang said that since mobile networks generate the most revenue, a lot of efforts and resources were put in improving mobile network. “Major expansion activities were carried out in 2016,” he said.
For instance the capacity of mobile network components such as core network and radio network were enhanced to decongest cellular traffic. Despite the many upgrades, he said that BT acknowledges that congestion in 3G services could not be eliminated completely. “But it was reduced by a large extent.”
He said 4G services would further reduce the congestion as it results in increased data handling capacity from 21mbps per tower to 200mbps. But BT, he said has also been bearing huge losses for delivering public service. For example, monthly revenue from Lunana is about Nu 40,000 while the cost of hiring chopper for maintenance and transportation is more than Nu 200M.
Drukair came out of the red after two years, making a profit of Nu 99M. This was possible because the airline was able to control its expenditure while increasing the flight frequency. It was able to retain 69 percent of the market share.
In preparation for hydropower works that required huge capital, the Construction Development Corporation Ltd (CDCL) suffered a loss of Nu 28M.
Despite a 31 percent increase in revenue and around Nu 3.38B in earnings, it is yet another year of loss for Dungsam Cement. The expenditure shot from Nu 3.6B in 2015 to Nu 4.14B last year. However, the company reduced its loss from Nu 737M to Nu 537M.
CEO Dorji Norbu said that price of raw materials rose and that there has been lot of breakdowns at the factory. The spare parts, he said are not easily available while strikes and issues raised by the truckers disrupted supply.
However, he said the market is increasing. Sales increased by 29 percent and production of both cement and clinker increased. About 30-40 percent of the supplies are made to hydropower projects. The company also earns 50 percent of the revenue in INR. State Mining Corporation also suffered a loss of almost Nu 4M.
There are 20 companies under DHI umbrella, which are either partially or fully owned.