ECONOMYNEXT – Profits of Sri Lanka’s state-run Ceylon Electricity Board fell 85 percent to 3.5 billion rupees, with revenues down 2 percent, interim accounts show.
Quarter on quarter profits were down from 5.3 billion rupees in June.
At group level profits were 466 million rupees, down from 29 billion rupees last year. Last year’s profits were boosted by other income and gains.
CEB revenues fell 2 percent from to 118.9 billion rupees in the September 2025 quarter, from 120.8 billion rupees a year go, and cost of sales went up 12 percent to 115.8 billion rupees.
Gross profits contracted 83 percent to 3.0 billion rupees.
In the nine months to September, the CEB reported a loss of 9.5 billion rupees, due to a price control involving a 20 percent cut ordered by the Public Utilities Commission of Sri Lanka in January 2025.
As a result, CEB’s accumulated losses grew to 413 billion rupees by end September 2025, from 398 billion rupees.
Under Rajapaksa regimes, state enterprises ran losses due to political decisions to subsidize energy off budget and the Ceylon Electricity Board did not submit requests most of the time to raise prices as the rupee fell or fuel or other costs rose.
The off-budget losses then ended up in the national debt as equity was injected.
Since the sovereign default, in which the losses CEB and CPC, which were financed by bank credit, played a key role, administrations under Ranil Wickremesinghe and President Anura Dissanayake had been prepared to take a political hit for long term national interest and submit tariff hikes to the regulator.
However, a challenge has come from the regulator not approving tariff hikes or imposing price controls triggering losses.
The CEB is also used by the authorities to give subsidies to small users, outside of the budget, undermining the transparency of public finances.
In 2025 the International Monetary Fund withheld a program disbursement after the price control imposed by the regulator.
In June, the CEB sought an 18.3 percent tariff increase on average, and the regulator gave a 15 percent increase.
A part of the losses of the CEB, as well as SriLankan Airlines have come from currency depreciation triggered by inflationary open market operations of the central bank and flawed exchange rate policy (flexible exchange rate).
In October 2025 the regulator against denied a 6.8 percent price increase sought by the regulator amid a depreciating rupee.
However there has been strong rainfall in the December quarter, which had pushed up hydro generation. The losses in the CEB come in part from the current pricing methodology, which the regulator is acting on.
Officials have said that they face lawsuits from customers if they do not adhere to the pricing methodology. There are attempts to reform the price methodology.
Sri Lanka also charges excessive prices from services, which may have killed a range of services exports which the country can engage in especially using the geographical location including data warehousing. (Colombo/Nov18/2025)