Laxapana Batteries PLC recently announced that it is entering the renewable energy business. Having evaluated prospects in this space, the company has stated its intentions to invest over Rs. 1 billion in generating renewable energy from rooftop solar projects.
To fund the investment, the company proposes raising Rs. 540 million by way of a Rights Issue, and also intends to lock-in long-term debt to benefit from the prevailing low-interest rate regime. At an Extraordinary General Meeting held on 10 February 2021, the Shareholders of Laxapana Batteries PLC approved the Rights Issue to offer 36,000,000 ordinary shares, which is in the proportion of 12 new ordinary shares for every 13 existing ordinary shares held at Rs 15/- per share. With a Rs. 1.1 billion investment to develop rooftop solar projects, Laxapana is well positioned with a sustainable business model to contribute towards the Government’s policy of increasing the share of renewable energy production in the nation’s total energy needs.
Despite the challenging economic environment that began with the onset of the Covid-19 pandemic, Laxapana has delivered a resilient performance in the financial year (FY) 2020/21 period. During these uncertain times, the company witnessed growth in Q3 FY 2020/21 with a revenue increase by 14%, over Q3 FY 2019/20 and profit before tax growing by Rs. 29.4 million. The company recorded a revenue of Rs. 206.2 million and Rs 552.7 million in Q3 FY 2020/21 and nine months ended 31 December 2020 respectively.
These compare to Rs. 180.4 million and Rs 506.2 million to corresponding periods in FY 2019/20. Cumulative profit before tax of Rs. 100.4 million for the nine months ended 31 December 2020 is a notable year-on-year (YoY) increase of 113% over Rs. 47.2 million recorded last year nine months despite numerous challenges encountered in the business environment.