CEB Profits Collapse as Tariff Cuts Push Utility Back Into Crisis
- CNL Reporter
- November 23, 2025
- News, Power and energy
- CEB Profits, Tariff
- 0 Comments
The Ceylon Electricity Board (CEB) has posted a dramatic earnings collapse for the quarter ending 30 September, with financial results showing sharp declines across revenue, margins and operating performance. Interim statements released this week reveal the utility sliding into a Rs. 9 billion loss for the first nine months of 2025, in stark contrast to the Rs. 152 billion profit recorded during the same period last year.
Revenue for the nine-month period plunged 30% year-on-year to Rs. 321.7 billion, while the cost of sales inched up 1% to Rs. 322.9 billion, pushing the utility into a gross loss of Rs. 1.2 billion. A year earlier, CEB had posted Rs. 129.2 billion in gross profit. Administrative expenses rose 20% to Rs. 10.3 billion, while finance costs halved to Rs. 11.4 billion yet this was not enough to prevent the utility from reporting a pre-tax loss of Rs. 7.3 billion.
The balance sheet paints an even bleaker picture: CEB now holds Rs. 361.5 billion in accumulated losses against assets of Rs. 1.3 trillion. The notes confirm that restructuring efforts are underway under the Sri Lanka Electricity (Amendment) Act, No. 15 of 2025, which mandates the unbundling of the state utility.
The September quarter illustrates the depth of the downturn. Profit after tax fell 98% year-on-year to Rs. 466.5 million, down from Rs. 29 billion a year earlier. Compared to the June quarter, profits fell 94%. Quarterly revenue slipped 5% year-on-year to Rs. 120 billion, while cost of sales surged 13% to Rs. 117.8 billion.
Gross profit for the quarter crashed 89% to Rs. 2.4 billion, and operating profit fell 94% year-on-year, reflecting a combination of rising generation costs, lower tariff income and weaker non-operating revenue.
This deterioration has been visible since early 2025. In the March quarter, CEB recorded a Rs. 16.9 billion loss, reversing an Rs. 88.3 billion profit the previous year. In the June quarter, profit dropped 78% year-on-year to Rs. 7.4 billion.
The Finance Ministry’s Mid-Year Fiscal Report identifies CEB as the largest drag on state-owned enterprise performance in 2025. Electricity sales revenue fell 38.8% to Rs. 192.6 billion in the first half, driven largely by tariff reductions even though demand grew 4.3%.
Average revenue per unit fell from Rs. 41.97 to Rs. 24.64, following a 20% tariff cut in January and a partial reversal in June. Although generation costs fell 8.7% due to strong hydropower output, this was insufficient to offset the steep fall in income.
Industry specialists say the crisis stems partly from misalignment between the tariff cycle and internal accounting. Energy analyst Dr. Vidhura Ralapanawe argues that delays in tariff filings, political interventions and inconsistencies in recording cost clawbacks distorted both the strong profits of 2024 and the losses of early 2025.
He warns that unless governance, data quality and financial management improve, the unbundling of CEB and the shift toward a commercially managed power sector will remain vulnerableregardless of temporary changes in tariff policy or hydropower conditions.
