People’s Power Q2 Loss Report Shows Rs 2.22m Drop
16th February 2026, Kathmandu
People’s Power Limited has officially released its unaudited financial statement for the second quarter of the fiscal year 2082/83, offering a comprehensive look into its operational health and financial trajectory. This period, ending in Poush 2082, reveals a complex picture for the hydropower operator. While the company maintained a consistent revenue stream from its electricity sales, it reported a net loss of 2.22 million rupees. This performance stands in sharp contrast to the corresponding quarter of the previous fiscal year, when the company recorded a healthy net profit of 8.31 million rupees. The shift from profit to loss highlights the significant impact that non-cash expenses and rising operational costs can have on the bottom line of a maturing energy project.
People’s Power Q2 Loss
A closer look at the revenue and operational metrics shows that the company’s top line remains remarkably stable. During the second quarter, People’s Power Limited generated approximately 31.71 million rupees from its core business of electricity generation. This figure is nearly identical to the revenue reported in the first quarter of the same fiscal year, suggesting that the company’s project, the Puwa 2 Hydropower Project, is operating at a consistent dispatch level despite the seasonal fluctuations that often affect smaller hydropower plants in Nepal. However, the stability in revenue was overshadowed by a sharp rise in direct and indirect expenses. Direct expenses during this quarter climbed to 7.15 million rupees, a significant jump from the 3.93 million rupees recorded in the prior quarter. This increase in the cost of sales naturally squeezed the gross profit, which fell from 27.81 million rupees to 24.55 million rupees.
The primary driver behind the reported net loss, however, was not the operational cost alone but rather the heavy burden of amortization. People’s Power Limited reported an amortization expense of 16.43 million rupees for the quarter. In the context of hydropower accounting, especially under the IFRIC 12 standards used by many Nepalese firms, the project’s infrastructure is often treated as an intangible asset that must be systematically written off over the period of the license. This non-cash charge, while not affecting the company’s actual bank balance, directly impacts the reported net profit. When combined with administrative expenses of 7.35 million rupees and other minor depreciation costs, the company was pushed into a negative territory of 2.22 million rupees.
Despite the short term net loss, the balance sheet of People’s Power Limited tells a story of significant structural strength and low financial risk. The company’s total asset base is substantial, valued at approximately 994.62 million rupees. More impressively, the company has successfully transitioned into a virtually debt-free position. The total liabilities are reported at a mere 1.63 million rupees, with the long term borrowings account currently sitting at zero. This is a remarkable achievement for a hydropower company, as these projects typically carry heavy debt loads for the first decade of their operation. The absence of interest payments on large loans provides the company with a significant advantage in terms of cash flow, even if accounting rules result in a reported net loss.
The company’s equity position remains robust, with total equity standing at 992.98 million rupees. This equity base was strengthened earlier in the year through an increase in share capital to 948.90 million rupees and the addition of a share premium worth 65.47 million rupees. Because the equity is so high and the liabilities are so low, the company’s net worth per share remains healthy at approximately 104.69 rupees. This indicates that the intrinsic book value of the company is still well above its par value, providing a safety net for shareholders despite the current quarterly earnings being negative.
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In the secondary market, investors have continued to show active interest in People’s Power Limited shares. During the review period, the stock traded within a range of 323 rupees to 360 rupees per share. The market’s willingness to trade the stock at a premium to its book value suggests that investors are looking past the current accounting loss and focusing on the company’s long term cash generation potential and its debt free status. Many market participants view hydropower companies not just through the lens of quarterly net profit, but through their ability to generate stable cash flows that can eventually be distributed as dividends once the initial heavy amortization phases are completed.
Operational updates from the company indicate that while the plant is generating electricity consistently, the sector as a whole remains vulnerable to external factors. Hydropower projects in Nepal must contend with seasonal variations in river flow, particularly during the dry winter months when generation levels can drop significantly. Furthermore, the risk of natural disasters such as floods and landslides remains a constant consideration for any project located in the mountainous terrain. For People’s Power, maintaining operational efficiency and minimizing maintenance downtime will be critical in ensuring that the stable revenue seen in the first half of the year continues into the second half.
Looking ahead, the strategic outlook for People’s Power Limited remains positive. The company’s primary goal for the remainder of the 2082/83 fiscal year will be to optimize its administrative costs and manage its operational expenses more tightly. If the company can maintain its current revenue levels and keep a lid on rising costs, it may be able to offset the heavy amortization charges and return to profitability in future quarters. The financial health of the company, characterized by its zero long term debt and strong cash reserves, gives it the resilience needed to navigate short term fluctuations.
In conclusion, the second quarter results for People’s Power Limited serve as a reminder of the unique accounting complexities within the hydropower industry. A net loss of 2.22 million rupees may seem concerning at first glance, but when viewed alongside a debt free balance sheet and a net worth of nearly one billion rupees, the overall financial health of the company appears solid. Investors and stakeholders will likely remain focused on the company’s ability to maintain its stable generation and its potential for long term value creation as the project matures and the accounting pressures of the early years begin to subside.
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