KARACHI: KE’s financial results for Q1 FY 23 showed a considerable decline owing to the impact of multiple macroeconomic and geopolitical factors. The company reported losses per share of PKR 0.59 in Q1FY23 compared to earnings per share of PKR 0.11 for same period last fiscal.
Gross profitability also decreased while the units dispatched to Karachi shrank by 8.9%. EBITDA decreased from PKR 11.8 billion to a loss of PKR 2.6 billion.
Tough economic conditions including but not limited to a depreciating rupee, increased inflation, high prices of fuel and non-availability of local gas, backlogs of PKR 80.4 billion in receivables from government, increased borrowing and financing costs were all cited as reasons for the financial performance.
KE’s cash flows remain volatile and sensitive to the overall national and global economic situation. The utility has been raising awareness on these challenges and remains in touch with relevant stakeholders to find a viable solution, but the current economic climate is hindering progress.
After the recent flurry of disclosures to Pakistan Stock Exchange and surge of reporting on the company’s shareholding, successful conclusion of the 112th Annual General Meeting and the issuance of the Director’s Report seemed to indicate that the KE Board remains active and the company’s internal position is stable.
Company disclosure to the PSX on Q1 results also presented a positive outlook despite the tumultuous outcome. KE stated that they are preparing for renewal of tariff for next control period, with aim to obtain sustainable “cost reflective tariff with robust adjustment mechanisms” to bring equity with other entities in power sector.
BQPS-III, KE’s long-awaited power plant, was reported to be in advanced stages of commissioning expected to be integrated into network by end of 2022 which will bring an expected 900-MW of efficient energy to the city.
Further 1200-MW of renewable energy are also planned to be added to the system to make cheaper electricity available for customers in the future. Transmission network is also undergoing investment for enhancement and construction work is underway to build new grids and linkages with National Grid for supply of excess power to Karachi.
T&D losses were also reported to have decreased from 17.0% in Q1 FY22 to 15.8% in same period of current fiscal. Company has provided 40,000 low-cost meters to regularize their electricity consumption. KE report also stated that partnerships with banks are allowing credit card holders to pay their bills and convert to instalment for ease in payment which appears to be a first in the industry.
The company also helped people in flood affected areas through donations from employees of Rs2.7 million which was matched by organization. Simultaneously, Akhuwat Solar microfinance fund has also been supported with PKR 7.5 million donations out of which PKR 5.7 million has been used to support 35 beneficiaries.
Copyright Business Recorder, 2022
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