… revenue grows by 12 percent

Thukten Zangpo 

Despite Druk Holding and Investments (DHI) and its subsidiary companies’ revenue growing by 12 percent, their net profits dipped by 5 percent last year compared to the previous year.

In the same period, the companies’ revenue increased to Nu 62.21 billion from Nu 55.45 billion, according to the budget report for 2023-24. Conversely, their net profits declined to Nu 11.07 billion from Nu 11.65 billion.

The revenue increase was attributed to the performance of the State Mining Corporation, Bhutan Power Corporation, and Drukair Corporation.

State Mining Corporation’s revenue grew to Nu 5.37 billion last year, an increase of Nu 1.14 billion from the previous year. At the same time, its profit improved by 22.5 percent to Nu 1.92 billion from Nu 1.57 billion during the same period.

The Bhutan Power Corporation’s net revenue increased by over 35 percent to Nu 14.85 billion last year. However, its profit decreased to Nu 829.81 million from Nu 1.36 billion in the previous year.

The Druk Green Power Corporation, which contributed the most among the DHI companies, saw its profit after tax decreased to Nu 4.63 billion last year from Nu 5.1 billion during the same period.

Similarly, Bhutan Telecom Limited’s profit grew to Nu 2.31 billion last year from about Nu 2 billion in the previous year. During the same period, Bank of Bhutan also saw its profit grow to Nu 679.57 million last year from Nu 465.83 million.  

After experiencing a loss of Nu 117.25 million in 2021, Bhutan Board Products made a profit of Nu 14.8 million last year.

Six out of 21 companies experienced losses last year. Despite Drukair Corporation’s revenue growing by over 155 percent last year, the company incurred the highest loss of Nu 888 million in the same year and Nu 1.13 billion in 2021.

Next to Drukair, Penden Cement Authority experienced a loss of Nu 228 million, Dungsum Cement at Nu 98 million, Azista Bhutan Healthcare at Nu 43 million, Natural Resources Development Corporation at Nu 28 million, and Koufuku International at Nu 12 million.

DHI’s standalone revenue increased by 26 percent to Nu 10.57 billion in 2022 compared to the previous year. The increase in dividends by 27 percent to Nu 10.17 billion from subsidiary companies like Bhutan Telecom, Bhutan Power Corporation, State Mining Corporation, and Bhutan Ferro Alloys, as well as foreign investments, helped the revenue grow.

DHI contributed Nu 7.09 billion or 17.4 percent to the government coffer—Nu 3.98 billion as dividends and Nu 3.11 billion as taxes last year. This was an increase of 29 percent from the previous year.

Corporate income tax for the year 2022 amounted to Nu 8.01 billion. The State Mining Corporation contributed Nu 495.1 million as royalty and licence fees, and Druk Green Power Corporation contributed Nu 2.35 billion as royalty.

Subsidies to DHI Companies

The total subsidies amounting to Nu 1.66 billion were transferred to the DHI companies in the fiscal year 2021-22.

Drukair Corporation received Nu 103.76 million as an interest subsidy, while Nu 1.47 billion was channeled through the Bhutan Power Corporation for domestic tariffs, and Nu 82.2 million was channeled through the Royal Insurance Corporation for rural houses and life insurance.

According to the budget report, subsidies to DHI companies are expected to decline by about 5 percent in the fiscal year 2022-23 and further decline by 65 percent due to the revision in domestic electricity tariffs in the next fiscal year 2023-24.