KATHMANDU: Nepal Electricity Authority’s pre-tax profit fell sharply in fiscal year 2025/26 despite a significant increase in electricity sales revenue, as foreign-exchange losses, financial expenses and operating costs weighed on its earnings.

According to the annual report presented by Acting Executive Director Dirghayu Kumar Shrestha at the authority’s 41st anniversary programme, NEA’s electricity sales revenue increased 18.20% to Rs 148.63 billion from Rs 125.74 billion a year earlier.

However, pre-tax profit plunged 58.60% to Rs 5.04 billion from Rs 12.17 billion, a decline of Rs 7.13 billion despite an additional Rs 22.89 billion in electricity sales revenue.

The sharp rise in foreign-exchange losses was a major drag on profitability. NEA’s foreign-exchange loss surged 272.86% to Rs 11.52 billion in FY2025/26 from Rs 3.09 billion the previous year.

Financial expenses also increased 20% to Rs 7.60 billion from Rs 6.33 billion.

Operating profit improves

Despite the decline in overall profit, NEA’s operating profit from its core electricity business increased. Operating profit rose to Rs 24.81 billion from Rs 23.13 billion, an increase of Rs 1.68 billion.

The rise in revenue was accompanied by a substantial increase in the cost of electricity sales. Total sales costs, including electricity purchases, generation, transmission and distribution expenses, reached Rs 117.39 billion, up from Rs 98.14 billion a year earlier.

NEA spent Rs 96.10 billion on electricity purchases alone. Of this, Rs 67.68 billion went to private power producers, Rs 17.86 billion to NEA’s subsidiary companies and Rs 10.56 billion to electricity imports from India.

The figures show that while NEA’s core electricity business continued to generate stronger operating earnings, rising financing costs and foreign-exchange exposure significantly eroded its overall profitability.