Lalpir Power Limited (PSX: LPL) and Pakgen Power Limited (PSX: PKGP) announced their half-year end results yesterday. Both companies operate 350MW furnace oil (FO) power plants and are part of the reputable Mansha group which also owns other power companies Nishat Power Limited and Engen Private Limited as part of its portfolio.
Both PKGP and LPL saw a dip in revenues which could be attributed to lower electricity dispatches in 1HCY18 period. PKGP’s capacity factor was 36 percent compared to 55 percent in 1HCY17 while LPL’s capacity factor remained at 34.5 percent as compared to 55 percent in the previous year.
The decrease in dispatches comes about because of a lower place in the merit order due to availability of more efficient plants including the newly set-up three R-LNG plants. Going forward, it is expected that the share of furnace oil power plants will continue to decline the overall energy mix of the country.
Both companies saw a negligible change in gross profits while net profits took a small dip on account of increased cost of generation coupled with lower dispatches. However, profitability margins witnessed some betterment with gross margins rising by 211 basis points while net margins rose by 82 basis points.
The most recently released quarterly reports by both companies did not mention the outstanding amounts by the CPPA. Like the majority of IPPs, PKGP and LPL have also been victims to the ever rising power sector circular debt which recently crossed the Rs1 trillion marks.
According to the previous quarter report an amount of Rs11.326 billion was outstanding against CPPA and out of this Rs2.125 billion was classified overdue for LPL. Similarly, Rs15.1 billion was outstanding for PKGP out of which Rs2.7 billion was classified as overdue by the company. Both companies have blamed the delay in payment for affecting their cash flows which has subsequently resulted in erratic fuel supply.
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