Nepal Electricity Authority(NEA) Profit Falls 43%
Nepal Electricity Authority’s net profit fell 43% to NPR 5.04 billion in FY 2082/83 as rising power purchase, operating and financial costs outweighed growth in electricity sales and other income.
Nepal Electricity Authority (NEA) reported a sharp decline in profitability in fiscal year 2082/83 with net profit falling 43% to NPR 5.04 billion from NPR 8.91 billion in the previous fiscal year.
The authority’s net profit declined by NPR 3.87 billion year-over-year despite growth in electricity sales and other sources of income. Rising expenses related to power purchases, operations and financial liabilities continued to put pressure on its bottom line.
Power purchase remained the largest cost component. NEA spent NPR 77.10 billion on electricity purchases, an 11.73% increase from the previous year. The authority has increasingly relied on electricity purchased from private-sector projects to meet demand and manage the power system.
Electricity sales generated NPR 125.277 billion, including NPR 17.471 billion from electricity exports to India. Across all revenue sources, NEA collected total revenue of NPR 138.87 billion during the fiscal year.
However, expenses continued to grow rapidly. NEA recorded NPR 129.81 billion in total expenses, leaving significantly less room for profit despite its large revenue base. Operating expenses alone reached NPR 97.787 billion, increasing 10.15% from the previous year.
The pressure on profitability extends beyond electricity purchases. Rising transmission and distribution costs, interest liabilities and continued investment in system expansion have added to the authority’s overall cost base.
Electricity exports to India have provided an additional source of revenue and partially supported NEA’s finances. However, the growth in expenditure has continued to outpace the growth in income, limiting the benefit of higher electricity sales and export earnings.
The latest results highlight the central financial challenge facing NEA: higher electricity sales are not translating into proportional profit growth because the cost of purchasing power and operating the electricity system is rising rapidly. Unless cost growth moderates, continued revenue expansion may not be enough to prevent further pressure on profitability.