Kohinoor Power Company Limited (PSX: KOHP) announced its financial performance for FY20 yesterday, and the power company’s earnings continued to be in the negative, despite revenue growth of 8 percent year-on-year.
Kohinoor Power Company Limited (KOHP) is power company incorporated in Punjab with the principal activity to own, operate and maintain a furnace oil power station with the capacity of 15 MW. However, the company has not been into the principal activity for a long time. The operations of the company remained closed for years as its sole purchaser, FESCO (Faisalabad Electricity Supply Corporation) stopped purchasing power on the directions Ministry of Energy (then Ministry of Water and Power) because it had started to shift the power generation away from expensive fuels like furnace oil and diesel.
Though the company tried to take advantage of the opportunity created due to revised power tariffs by selling the electricity to bulk consumers later, KOHP in FY16 eventually started leasing its engine to Saritow Spinning Mills Limited. In addition, it also invested in the equity market and rented its building. Since then, the company’s revenue source has changed.
Hence, the company’s bottomline has remained negative since FY12. In FY20, the company’s earnings continued to be affected by its investment in equity market, although the loss for the period wtinessed a decline of 13 percent, year-on-year. Also, the company incurred sales tax audit fee for FY13 as well as consultant fee for consultancy for merger and others as process of amalgamation of Kohinoor Power Company Limited and Saritow Spinning Mills Limited has been going on after the board of directors gave approval in 2018.
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