K-Electric swings to full-year net profit versus 2020 loss

Our Correspondent
Tuesday, Sep 14, 2021

KARACHI: Power utility K-Electric swung to a full-year net profit of Rs11.998 billion in financial year 2021 from to a hefty loss of Rs2.959 billion in the previous year, the company said on Monday.

Earnings per share (EPS) of 0.43 rupees/share in FY21 as compared to loss per share of 0.11 rupees in FY20. "During the period, driven by investments of around Rs81 billion across the power value chain supplemented by improved economic conditions and revival of economic activity post the Covid-19 lockdown, as well as favorable government policies, the company showed strong operational performance including T&D loss reduction from 19.7 percent in FY 2020 to 17.5 percent in FY 2021 and improvement in recovery ratio from 92.1 percent in FY 2020 to 94.9 percent in FY 2021," the company said in a statement.

It said increase in total assets has also been observed from Rs703.414 billion in FY20 to Rs835.677 billion in FY21. Moonis Alvi, CEO, K-Electric said the company's financial results have shown a satisfactory improvement after the last year’s drop in profitability due to Covid-19

"The reduction in T&D losses and improvement in recovery ratio is yet another reflection of our strong performance, sustained investments in our systems and infrastructure to enhance efficiency and services to our customers," Alvi said.

"We are engaged with government of Pakistan and other relevant stakeholders for sustainable resolution of circular debt and to receive required regulatory approvals, which will enable us to continue to strengthen infrastructure for enhancing our ability to serve our customers and continue our improvement trajectory.”

The statement said the utility company has undertaken various initiatives to increase system reliability and meet the city’s growing power demand. On the self-generation front, construction works on the 900 MW RLNG fired project, Bin Qasim Power Station-III (BQPS-III) is progressing on the fast track basis. Upon completion, the $650 million power plant, will be among the top five most efficient plants in the country. Work on the first unit of 450MW is 90 percent complete while the second phase of 450MW is also proceeding swiftly.

In August 2021, KE entered into a Gas Supply Agreement (GSA) with Pakistan LNG Limited (PLL) for the provision of 150 MMCFD RLNG to KE’s Bin Qasim Complex.

Pursuant to successful additional power withdrawal of 450-600 MW from National Grid through existing interconnections starting from April 2021, the company has also initiated the process for setting up new grids and interconnections for off-take of further additional power from the National Grid, which will take the total supply from National Grid to 2,050 MW, it added.

During the year, KE enhanced its transmission capacity through the addition of five new power transformers along with a 132kV Mehmoodabad Grid Station, which will help in catering to the rapid demand growth from the residential segment in the area.

Futher, the addition/replacement of power transformers resulted in the net addition of 184 MVAs during the year, taking the total transformation capacity to 6,536 MVAs which is sufficient to meet the peak demand in KE’s serviced area.

On the Distribution front, KE is scaling up its efforts to combat power theft, by installing theft-resistant Aerial Bundled Cables (ABCs). So far around 11,000 PMTs have been converted to ABCs across KE network with full determination to convert the remaining high loss PMTs swiftly and sustainably.

During the year, KE also launched K-Solar, a subsidiary that provides solar energy solutions to industrial, commercial, and residential customer segments with improved access and latest technologies.

The statement said a key concern for KE remains the prevailing circular debt situation affecting the sustainability of the sector. "Delay in the release of tariff determination of DISCOs including K-Electric, continues to cause accumulation of receivables and adversely impacting the liquidity."