Ghana Grid Company Limited (GRIDCo) saw a significant decline in its pre-tax profit, dropping by 99.5% to reach ¢1.296 million at the close of 2021.
This marked a noteworthy deterioration in the company’s fundamental business performance, given that it had achieved a profit of ¢270.704 million in the preceding year, 2020.
The 2022 Auditor General Report disclosed that the company’s Total Comprehensive Income also experienced a decline of 35.1%, amounting to ¢197 million compared to the ¢304.113 million recorded in 2020.
This decline was primarily attributed to the revaluation of GRIDCo’s property, plant, and equipment, a process conducted in 2021.
The revaluation exercise led to a corresponding tax liability of ¢111.331 million in 2021, in contrast to the ¢17,725 million in 2020.
Income tax expenses increased to ¢142.625 million in 2021, up from ¢88.425 million in the previous year.
However, there was a marginal rise of 8.3% or ¢100.258 million in Total Income, reaching ¢1.314 billion from ¢1.213 billion in 2020.
This increase was largely attributed to an 8.8% growth in revenue from transmission services throughout the year.
Conversely, GRIDCo’s total expenditure surged by 39.2% to ¢1.312 billion from ¢943.268 million recorded in 2020.
The increase stemmed mainly from higher impairment losses on trade receivables by ¢334.790 million and an increase in Direct costs by ¢67.828 million compared to the previous year.
In terms of the balance sheet, Current Assets witnessed a 9.8% increase, rising by ¢153.065 million to ¢1.718 billion from ¢1.565 billion in 2020, primarily due to the growth in cash and cash equivalents by ¢237.857 million.
Conversely, Non-Current Liabilities experienced a decrease of 5.7%, amounting to ¢119.525 million, with the year ending at ¢1.991 billion from ¢2.111 billion in 2020. This reduction was attributed to a decrease in Loans and borrowings.
However, Current Liabilities surged by 24.6%, translating to ¢484.928 million, reaching ¢2.452 billion compared to ¢1.967 billion in 2020.
This increase was mainly influenced by rises in current tax liabilities, loans and borrowings, and trade and other payables by 74.1%, 57.4%, and 14.5% respectively.
Moreover, the current ratio for the end of the 2021 fiscal year stood at 0.7:1, contrasting with 0.8:1 in 2020.
This implies that the company may face challenges in meeting its short-term financial obligations.