The Net Profit Margin declined from 26.32% in 2020 to 20% in 2024, reflecting a downward trend in overall profitability.
The average EBIT Margin during the analysis period was 35.06%, showing relatively strong operating efficiency despite the decline in net margins.
Asset turnover improved from 0.49 times in 2020 to 0.64 times in 2024, indicating better utilization of assets in generating revenue and highlighting stronger efficiency in asset management even as profitability weakened.
Profitability
Geregu Power’s revenue trend has been volatile over the analysis period. Between 2020 and 2021, revenue grew by 32.23%, but this was followed by a sharp decline of 32.19% between 2021 and 2022. The company rebounded strongly in the current period (2023–2024) with a significant 65.43% increase, highlighting renewed top‑line strength.
Profitability performance looks good during the period of analysis, suggesting that despite revenue fluctuations, the company has been able to maintain efficiency and generate healthy returns. This indicates resilience in operations and effective management of resources, even in the face of revenue volatility.
Liquidity
The company’s liquidity position has weakened, as the current ratio declined from 1.98:1 to 1.13:1 in the last year. While the ratio remains above 1:1—indicating that current assets are still sufficient to cover current liabilities—the reduction highlights a narrowing margin of safety. This suggests that although the business can meet its short‑term obligations, its flexibility in managing working capital has diminished, leaving it more exposed to potential cash flow pressures
Capital Structure
Geregu Power is financed through a mix of equity and debt.
The debt-to-equity ratio has been on a decreasing trend year on year, showing some improvement in reducing reliance on debt. However, the gearing position remains high at 363% in the current year, indicating significant dependence on debt financing. This level of leverage exposes the company to elevated financial risk and interest obligations, making it essential to strengthen equity financing and sustain profitability to achieve a more balanced capital structure.
