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Message from the Chairman

“25 Years of Excellence”

Dear Owners of Summit Power Limited,

Greetings and As-Salam-u-Alaikum. We are pleased to welcome you to the 26th Annual General Meeting (AGM) of Summit Power Limited (SPL). I am so pleased that we are meeting physically after a hiatus of over 4 years. The COVID pandemic, unfortunately, did usurp many lives and livelihoods. We are blessed and thank Allah Subhanatala for his mercy on us and the world, for being able to come out of it in a relatively short time compared to previous global pandemics. Our company also has suffered during this difficult time for humanity. While last year was our worst performance year in 25 years, this year i.e. 2023-24 we are seeing SPL’s profits return to normal years. We are seeing the rainbow return after a few years of challenges.

On the 25th anniversary of Summit Power Limited, I had thought of huge celebrations. I am embarrassed and regret that last year (July 2022 - June 2023) was the worst for Summit Power. Immediately after COVID, the supply chain of the world got disrupted, followed by the Ukraine- Russia war, which disrupted energy prices. Oil prices went from USD 60 per barrel to USD 112 per barrel, and natural gas in LNG form moved from USD 10 per mmbtu to USD 40 per mmbtu. These rises in prices disabled our sole buyer, Bangladesh Power Development Board (BPDB) from paying our undisputed bills by more than 7 months. This delay had a double detrimental effect on SPL. First, we had to pay interest to finance these unpaid bills and second, when we would eventually get paid, the United States Dollars appreciated by up to 30 percent. Our payables to suppliers and banks, e.g. of oil and loans, had to be repaid by the new taka dollar rates. 

In the third and fourth quarters of 2022-2023, SPL suffered its first losses of BDT 12 crore and BDT 124 crore, resulting in a profit of only BDT 172 crore for the whole year. I am sorry, but all over the world, including Bangladesh, power generators typically lost much more than SPL. Because of our strengths, we turned around in the first and second quarters of 2023-24, i.e. July - December 2023. Our profits soared to more than BDT 150 crore per quarter (unaudited). I believe that in next year’s AGM, SPL will be able to return to previously profitable years. I must humbly submit that these losses have and should wisen all the owners and managements to the unseen risks and dangers of global pandemics and wars. We must hold on to our course and vision, and Inshaallah, we will always come out of our difficulties.

I would like to thank all the owners, employees, investors, lenders, and policymakers for their support. I personally want to take the opportunity to congratulate you for being part of Bangladesh’s pioneering team, which laid the foundation of private power generation. I consider it to be one of my life’s greatest achievements. I am delighted to see the unprecedented enhancement of infrastructure, including electricity by the government of the Honourable Prime Minister. I hope SPL continues to contribute towards Golden Bangladesh.

Electricity is such an underlying infrastructure that it has improved quality of life from cities to villages, from factories to agricultural fields, education to entertainment, and brought transparency in small business operations to overall governance. During the pandemic, quality power enabled education, healthcare, banking, and overall safety.

With over 20 power and energy projects implemented in Bangladesh, Summit gained confidence and therefore opened venues for many more Bangladeshi businesses to participate in private power generation. Now over sixty companies are members in Bangladesh Independent Power Producers Association (BIPPA). The technology transfer has enabled Bangladeshi engineers to run power plants. It gives me great satisfaction to know Summit Group of Companies employs the largest number of engineers in the private sector in Bangladesh. Our commitment to health & safety standards and financial transparency have commanded the respect of international investors such as the International Financing Corporation (IFC), GE Corporation of USA, JERA of Japan and Mitsubishi of Japan. Your company is a beacon, a flagship for attracting foreign direct investment (FDI) into Bangladesh. 

The Board of Directors has proposed a cash dividend for your approval that is less than our usual, keeping in view the lower profit and maintaining retained earnings for future security. I do believe that in the coming years, our profitability will be much better as will be our ability to declare dividends.

In a way, we have crossed the bridge over troubled waters, safely. Recently, three power plants have received further extension of the Power Purchase Agreements (PPAs) on the “No Electricity, No Payment” basis. I believe this was a good decision with economic benefits to our customers, utilising existing infrastructure to manage load distribution. The exchange rate has been steady for most of the first and second quarters of FY 2023-24, and BPDB has mostly regularised payments. The Special Bonds issued under the stewardship of the Bangladesh Bank (BB) through commercial local banks have eased your company’s financial stress. We are continuing to pursue true-up payments with the government. The overall health of the US dollar reserve, remittance, and export are good enough for us to be hopeful about better earnings therefore dividend payouts in the coming years.

We are presently looking into renewable energy projects. The first one is with Denmark’s COP for onshore/offshore wind farms in the Bay of Bengal. The Investment Committee of SPL is also watchful of possible opportunities. 

For the next 25 years, the leadership of your Company is emphasising institutionalisation and continuation and expansion, thus supporting shareholders like you, the nation and perhaps even investment abroad.

Lastly, it has been an exhilarating, wonderful 25 years as your company’s Chairman. It would be prudent to be by the side of new leadership to submit my wisdom, and ensure the uninterrupted development of our companies. This year, as Summit Power comes back to profitability, it would be time to consider handing over the batons.

We look forward to your continued support in the years ahead.

Sincerely always at your service,

Muhammed Aziz Khan
Founder Chairman
20th February 2024