Financial Analysis of Chilime and Arun Valley Hydro

Presenters:Anzu KoiralaGaurav OjhaRam NeupaneRamesh Aryal

Introduction of Hydropower Development Policy in 1991 and Electricity Act in 1993 opened new avenues for private sector to invest in hydroelectric projects

Chilime Hydropower

Chilime Hydropower Company Limited (Chilime) was incorporated in 1995 with an objective of hydroelectricity generation through optimal utilization of resources within the country.

 Located in Rasuwa district and it owns and operates 22.1 MW power plant commissioned on August 25, 2003

It sales bulk electricity to NEA at the long term Power Purchase Agreement (PPA) price

Chilime, through its three subsidiaries, is developing four hydropower projects with aggregate capacity of 270.3 MW.

Arun Valley

Arun Valley Hydropower Development Company Limited was established in 1997.

The company is converted into public limited company in August 2005. The company floated 30% of its share to public.

It own Piluwakhola Hydropower Project (3MW).

The company has signed Power Purchase Agreement (PPA) with Nepal Electricity Authority on 23 January 2000.

The company is also planning to develop multi-purpose projects that will include any combination of hydro, irrigation, drinking water, flood control, fishery, and so on.

Chilime Hydopower: A Financial Overview

Contd……

Total financing cost of Chilime at the time of completion of its project in Rasuwa was Rs 2.5 billion.

Rs 960 million was financed through equity investment, rest of the amount was collected from borrowings.

Paid back its loan within 3 years. Now it has paid up capital of Rs 1.35 billion. Is investing around Rs 7 billion in four projects

within the course of the next five years.

Had made a net profit of Rs.777.43 million in fiscal year 2009/2010.

Again made a net profit of Rs. 843.14 million in fiscal year 2010/2011.

During the last fiscal year of 2009/2010 dividends were not given..

This fiscal year of 2010/2011 dividends of Rs.495.36 millions were paid away.

NEA51%

Genaral Pub-lic

49%

Share Ownership

Kabeli A: 25MWLower Phemekhola: 35 MWLower Pimuwakhola: 11MWUpper Khimti: 12MW

Arun valley Hydro

Income Generation

2062/63 2963/64 2064/65 2065/660

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10

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25

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35

40

45

Net Income

net income

Net Worth

2062/63 2963/64 2064/65 2065/660

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100

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Net Worth

net worth

Financial Indicators

Financial Indicators

2062/63 2063/64 2064/65 2065/66

Net worth per share

133.57 150.31 184.83 188.8

Earnings per share

25.49 31.74 34 29

Company’s Capital Structure

Market price

2065/66 2066/67 2067/68 2068/690

100

200

300

400

500

600

market price

Comparative Analysis

Profitability ratio

Chilime Arun

ROA 0.201 0.101

ROE 0.206 0.153

Profit Margin 0.95 0.52

1. Profitability status

2. Capital StructureRs.726.9 million of Chilime versus Rs.226.56 million of Arun valley.

3. Capital Composition

Both companies were established with 2/3 of debt but right now only Arun Valley has the debt in the capital structure

4. EPS DPS and number of shareholders

Fiscal Year 2065/66 2066/67EPS 102 106DPS 60 70Shareholders 7.296m 8.256mEPS 28.97 9.83DPS 40 47.13Shareholders 1.2m 2.401m

Chilime

Arun

Thank you