K-Electric Reports Rs. 12.3 Billion Profit For FY2018September 19, 2019
After much delay, K-Electric (KE) has announced its financial results for the FY 2018. The firm had to delay reporting its financial results for FY2017 and FY2018 due to the announcement of a new multi-year tariff (MYT) for 2016-23, after the previous seven-year MYT expired on June 30, 2016.
KE declared 18.16% growth in profits to Rs 12.3 billion as compared to Rs. 10.4 billion during the same period of FY 2017, resulting in earnings per share (EPS) increasing to 0.45 rupees per share in FY18 from 0.38 rupees per share in FY17.
The growth was seen due to the increase in sales of power in rupee terms and upward adjustment in tariffs.
The reduction in T and D losses from 21.7% in FY2017 to 20.4% in FY2018 along with higher units sent-out (16,580 GWh in FY 2017 to 17,419 GWh in FY 2018) have been the major contributing factors towards the improved financial results.
The company sold electricity of over Rs. 184.16 billion in FY18, up by 9% as compared to Rs. 168.57 billion in the previous year. Moreover, it received Rs. 32.97 billion on account of tariff adjustment in the year compared to Rs. 15.29 billion in the corresponding period.
Other income of the company inched downwards to Rs. 8.47 billion compared to Rs. 9.39 billion in the previous year.
In recognition of the power utility’s improved performance and its investment plan across all business verticals, the Board also decided to reinvest the profit earned in the business. Moreover, KE’s balance sheet remains healthy, with total assets amounting to Rs. 474 billion in FY 18 as compared to Rs. 396 billion in FY 17.
According to Moonis Alvi, CEO, K-Electric,
In line with our objective of delivering a reliable and safe power supply to customers amidst multiple challenges, KE has invested over USD 2.1 billion across the energy value chain between 2009 to 2018. These investments have resulted in an addition of over 1,057 MW of efficient power generation capacity, improvement of overall fleet efficiency from 30.4% in 2009 to 37.4% in 2018, 15.5% points reduction in Transmission and Distribution (T and D) losses and enhanced T and D capacity by 29% and 60% respectively. On the back of these operational improvements, today over 70% of the city is exempt from load-shedding with 100% exemption to industries since 2010. KE remains firm in its vision to provide safe and reliable power to all its customers underpinned by investments of around USD 3 billion over the span of next four years, across the power value-chain, resulting in energy self-sufficiency and propelling the socio-economic growth of Karachi and Pakistan.
Distribution and Generation
On the distribution front, KE is scaling up its efforts to combat power theft by installing Aerial Bundled Cables (ABCs). So far, nearly 7500 PMTs have been converted to ABCs with plans to convert the remaining PMTs swiftly and sustainably.
For self-generation, KE is setting up a 900 MW re-gasified liquefied natural gas (RLNG) power plant at its Bin Qasim Power Complex.
KE is also working towards the finalization of the Engineering Procurement and Construction (EPC) contract with China Machinery Engineering Corporation (CMEC) for a 700 MW coal-fired power plant.
In addition, KE is negotiating with Pakistan Atomic Energy Commission (PAEC), National Transmission and Despatch Company (NTDC) and CPPA-G to import 500 MW power from the under-construction nuclear power plants KANUPP II/III whereas another renewable IPP, Gharo Solar a 50 MW solar project, is expected to achieve Commercial Operation Date (COD) by the end of 2019.
The company’s TP-1000 project, costing over $450 Million, is on course for successful completion by the end of 2nd Quarter of FY 2020.
A key concern for KE, as with other power sector companies, is the prevailing circular debt situation affecting the sustainability of the sector.
As of July 2019, the outstanding receivables of KE have ballooned to Rs. 196 billion, on account of outstanding payments from various federal and provincial public sector entities, and are nearly twice as high as its payables which total around Rs. 109 billion.
Source: Pro Pakistani