GRIDCo Registers 99.5% Reduction In Profit – Auditor General Report

The Ghana Grid Company Limited (GRIDCo) has registered a reduction in profit before tax by 99.5% to end the year 2021 with ¢1.296 million.

This showed a deterioration in the underlying business of the Company. In 2020, GRIDCo recorded a profit of ¢270.704 million.

According to the 2022 Auditor General Report, the Company recorded a fall in Total Comprehensive Income by 35.1% to ¢197 million compared with ¢304.113 million in 2020.

This performance was mainly as a result of the revaluation of the company’s property, plant, and equipment undertaken in 2021.

The related tax arising out of the revaluation exercise amounted to ¢111.331 in 2021 compared to ¢17,725 in 2020. Income tax expenses of ¢142.625 million was recorded in 2021 compared with ¢88.425 million in 2020.

Total Income however increased marginally by 8.3% or ¢100.258 million to ¢1.314 billion from ¢1.213 billion in 2020. This increase was occasioned by an 8.8% increase in revenue from transmission services during the year.

The company’s total expenditure similarly increased by 39.2% to GH¢1.312 billion from ¢943.268 million recorded in 2020. The rise was mainly due to increases in the impairment loss on trade receivables by ¢334.790 million and Direct costs by ¢67.828 million over the previous year.

For the balance sheet, the Current Assets increased by ¢153.065 million or 9.8% to ¢1.718 billion from ¢1.565 billion in 2020 and was largely due to an increase in cash and cash equivalents of ¢237.857 million.

Non-Current Liabilities however decreased by 5.7% which translates into ¢119.525 million and ended the year at ¢1.991 billion from ¢2.111 billion recorded in 2020. This was caused by a decrease in Loans and borrowings.

Current Liabilities, however, increased by 24.6% which translates into ¢484.928 million to ¢2.452 billion compared with ¢1.967 postedposted in 2020. This was caused by increases in current tax liabilities, loans and borrowings and trade and other payables by 74.1%, 57.4%, and 14.5% respectively.

Also, the current ratio at the end of the 2021 financial year was 0.7:1 (2020 – 0.8:1).

This means that the company would not be capable of meeting its short-term financial obligations.