(MEN)Mountain Energy Nepal Posts 50% Profit Growth in Q3 FY 2081/82 Despite Lower Borrowings and Cost Pressures

Kathmandu, Nepal – Mountain Energy Nepal Limited has delivered an impressive financial performance for the third quarter of the fiscal year 2081/82, registering a 50.45% year-on-year increase in net profit. The company’s robust profitability comes on the back of increased revenue, reduced borrowings, and better expense management—solidifying its position in Nepal's growing energy sector.

Strong Revenue Growth Backed by Operational Efficiency

In Q3 2081/82, the company recorded total revenue of Rs. 922.76 million, reflecting a 6.05% growth compared to Rs. 870.16 million in the same quarter last year. This steady rise in revenue signals consistent energy generation and efficient project execution across its hydropower assets. Such growth is especially notable amid market volatility and rising operational challenges in the hydropower sector.

Significant Jump in Net Profit and EPS

The bottom line saw a remarkable boost, with net profit rising to Rs. 465.06 million, up from Rs. 309.12 million in Q3 2080/81. This translated to a jump in Annualized Earnings Per Share (EPS) from Rs. 18.21 to Rs. 23.82, a 30.82% increase, indicating higher returns for shareholders.

Debt Reduction Strengthens Financial Health

A key highlight of this quarter is Mountain Energy’s strategic reduction in debt. The company lowered its borrowings by 12.64%, bringing it down to Rs. 2.77 billion from Rs. 3.17 billion. Lower debt not only reduces financial risk but also leads to decreased interest payments, which was clearly reflected in the company's 12.56% drop in finance coststo Rs. 181.78 million.

Disciplined Cost Control

The company maintained tight control over expenses. Administrative costs saw a minor decline of 1.37%, reducing from Rs. 28.50 million to Rs. 28.11 million. These efficiency efforts, coupled with reduced borrowing, enabled Mountain Energy to maximize profits without major increases in operating costs.

Asset Base and Net Worth Trends

While financial metrics were strong, the company’s Property, Plant, and Equipment (PPE) declined slightly by 3.63% to Rs. 27.06 million. Additionally, Net Worth per Share saw a 3.85% drop, from Rs. 151.72 to Rs. 145.87, which could reflect dividend payments or accounting adjustments despite profitability.

Market Valuation and Investor Outlook

At the end of Q3, Mountain Energy’s share price stood at Rs. 566.10, placing its Price-to-Earnings (P/E) ratio at 23.76 times. This suggests that the stock is fairly valued compared to other energy sector players, considering its EPS growth and profitability track record.