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Scorecard
Butwal Power Company Ltd., privatized two years ago, has reported a net profit of Rs. 235.4 million in the fiscal year ended on mid-July 2004 as compared to a net loss of Rs. 44.9 million incurred in the previous year. The company has decided to distribute 40% dividend to the shareholders for the year 2004 including the 20% interim dividend distributed earlier. During the year, the company earned an operating income of Rs. 294.8 million as compared to Rs. 107.9 million in the previous year.
The company’s net profit in the fiscal year ended on mid-July 2002 was 128.9 million. It had incurred loss in 2003 largely due to some damages caused to its generation and distribution system by the Maoists.
Soaltee Hotel Limited has incurred a net loss of Rs. 44.4 million in the year ended on mid-July 2004 as compared to a net loss of Rs. 37.8 million in the previous year. This is the third year in a row that the hotel has incurred a net loss. As a result, the company did not distribute dividend to the shareholders also this year.
However, the company reported a cash profit of Rs. 3.7 million in 2004 as compared to Rs. 3.2 million in the previous year.
The reasons for the increased net loss as cited by the company’s board include increased interest and depreciation expenses for the investment in the Flight Catering Unit, substantial increase in the prices of diesel and kerosene and nearly 50% decrease in the average room rate in spite of an increase in the room occupancy.
In the fiscal year 2004, the occupancy at the hotel was 56.73% as compared to 40.64% in the previous year. However, the average room rate in 2004 was Rs. 2,725 as compared to Rs. 2,775 in the previous year.
The company received 12% dividend from Bhote Koshi Power Company (P) Ltd. in 2004, according to its annual report.
Hotel Yak and Yeti Ltd. has reported a net loss of Rs. 7.26 million in the year ended on mid-July 2004 as compared to Rs. 8.88 million net loss incurred in the previous year. As a result, the company did not distribute dividend to the shareholders.
The loss was despite an increase in the net room sales (to Rs. 349.9 million in 2004 from Rs. 342.0 million in the previous year) as the increase in the sales was accompanied by increase in the operating costs particularly due to increased expenses in terms of salary and wages, electricity and fuel, repair and maintenance, and advertisement and sales promotion.
The hotel registered a marginal increase in the room occupancy (63.32 in 2004 from 62.67 in 2003) and in the average room rate (Rs. 3,327 in 2004 from Rs. 3,165 in 2003). However, the ARR is still lower than what it was in 2002 (Rs. 4,120).
During the first four months of the current fiscal year (mid-July to November end 2004), the occupancy rate in the hotel was 54.09% while it was 64.83% in the same period previous year. However, the ARR has significantly increased to Rs. 3,551 during the period this year as compared to Rs. 3,163 in the same period of the previous year.
United Insurance Company (Nepal) Ltd. has reported a net profit (after tax) of Rs. 7.01 million in the year ended mid-July 2004 as compared to Rs. 3.38 million in the previous year, thus recording a hefty 107% increase.
During the year the company increased premium collection by about 20% to Rs. 90.84 million. In the first three months of the current fiscal year (2004-05), the company has increased its premium collection by about 24% as compared to the same period last year.
However, the company did not distribute dividend for the year 2004 as it can not do so before it increases the paid up capital to Rs. 100 million. Therefore, the profit so retained is likely to be distributed as bonus share in the near future.
Ace Finance Company Ltd. reported a marginal increase of 2.08% in its net profit after tax in the year ended on mid-July 2004 reaching Rs. 23.84 million. Its net profit in the previous year was Rs. 23.36 million. The company has decided to distribute 20% dividend for the year 2004 as compared to 15% in the previous year.
People’s Finance Company Ltd. has reported Rs. 4.66 million as net profit after taxes and provisions in the year ended on mid-July 2004 as compared to Rs. 0.77 million in the previous year. The increase was achieved despite a reduction in the net interest income (excess of interest income over interest expenses) and it is attributed to a hefty reduction of Rs. 4.20 million in the reserve for the loan loss provision as the company was able to recover that much of loan classified as bad loan in the previous year. As the money was realized by the company in 2004, it could be transferred to the profit in the year 2004.
The company has decided to distribute 10% dividend to its shareholders for the year 2004. Last year the company was not able to distribute any dividend.
Laxmi Bank Ltd. has reported a net profit of Rs. 10.5 million in the year ended on mid-July 2004 as compared to Rs. 1 million in the previous year. The figures are before the merger of Hisef Finance Ltd. in the bank as the permission for the merger was received from the Company Registrar only on July 26, 2004, i.e. after the fiscal year 2004 was completed.
Salt Trading Corporation (STC) has reported a net profit of Rs. 73 million in the fiscal year ended on mid-July 2004 as compared to Rs. 50 million in the previous year, thus recording about 48% increase in the net profit.
However, during the first five months of the current fiscal year that started on mid-July 2004, the turnover of the company shrunk nearly 45%. The reason cited include: difficulty in importing chemical fertilizers and sugar and suspension by the government to sell subsidized kerosene. Last year, the government had introduced a system of selling subsidized kerosene under ration card system and STC was chosen as the distribution agency under this scheme.
The corporation still targets an annual turnover of Rs. 4000 million and a year-end profit of Rs. 80 million in the ongoing fiscal year as it has already entered into agreement with the foreign suppliers to import chemical fertilizers, rice and sugar.
The corporation is also planning to enter the growing housing business.
Bank of Kathmandu Ltd. has reported 55.3% increase in its net profit (after tax) for the year that ended on mid-July 2004 reaching Rs. 127 million. The company has decided to distribute 10% as cash dividend to its shareholders. Another 10% is transferred to capital adjustment reserve out of which it plans to distribute stock dividend. One major reason for the profit increase is described as the success to realize some of the loans classified earlier as non-performing assets. It realized Rs. 34.3 million or 10.35% of such loan in the year that ended on mid-July 2004. The company was also able to reduce its operating expenses by 4.96% in the year as compared to the previous year.
Nepal Investment Bank Ltd. has reported a 30.8% increase in its net profit after taxes and provisions reaching Rs. 153 million in the year ended on mid-July 2004. According to its annual report, the NPA of the bank is a meager 2.47%, which is well below the industry average in the country and meets even the international standard. The company has decided to distribute 15% cash dividend to its shareholders for the year 2004 and to distribute right shares at the ratio of 1:1 which will increase its paid up capital to Rs. 590.6 million. The management of the company is also upbeat at the improvement it has effected in the ambience in its head office at Durbar Marg of Kathmandu which it hopes will enhance customer satisfaction.
Nepali finance companies have brought out their semi annual financial report for the fiscal year 2004-05. As per the report published by the companies, Patan Finance Co. Ltd., Navadurga Finance Co. Ltd and PMBFL are in profit. They have earned 6613.57, 82354 and 3500 thousand rupees operating profit respectively but Investment and Credit Finance Ltd. has an operation loss of Rs. 756.72 thousands.
Similarly, NCM Mutual Fund has brought out the statement of assets for the semi annual period. According to the report published based on the weighted average price of shares traded during December-January 2004-05, the per unit net assets value (NAV) is Rs. 12.73.
Corporate Kaleidoscope
l The tenure of the international management team in the state-owned commercial bank-Rastriya Banijya Bank-has been extend by a year and a half till mid-July 2006. The team is headed by Bruce Henderson, a US national.
l Everest Bank Ltd. conducted a special 15-days Deposit Campaign on the occasion of New Year during January 2-17, 2005 by reducing minimum deposit requirement to Rs. 2,500 within the Kathmandu Valley and Rs. 1,000 outside the valley.
The campaign was successful as over 10,000 new accounts were opened, says the company.
l Mercantile Solutions (P) Ltd., assembler of Nepal's first branded personal computer, has received ISO 9001:2000 certification for computer assembing, sales and support services.
Kumari Bank Ltd. has opened a branch in Pokhara increasing the number of its branches to four.
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