K-Electric reports PKR 10.4 billion profit for the FY2017
KARACHI: The Board of Directors of K-Electric Limited in its meeting held on July 04, 2019 at KE head office, approved the Company’s financial results for the year ended 30 June 2017. The power utility continued to improve operationally, driven by investments across the value chain, and is geared up to progress further on the back of a robust investment plan of USD 3 billion over the next few years. In its financial results issued to the PSX, KE declared profits of PKR 10.4 billion as compared to PKR 31.8 billion during the same period of FY 2016 resulting in earnings per share (EPS) reducing to 0.38 rupees per share in FY17 from 1.15 rupees per share in FY16. While key operational indicators showed sustained progress during FY 17, KE’s net profit reduced around 67% as compared to FY 16, mainly due to significant reduction in tariff level along with change in tariff structure under the new Multi Year Tariff (MYT) for the control period July 01, 2016 to June 30, 2023. According to Moonis Alvi, CEO, K-Electric, “KE has remained resolute in the face of multiple external challenges and has continued to deliver on its commitment to powering Karachi and serving its customers. Between 2009 and 2017, we have invested over USD 1.7 billion across the energy value chain resulting in addition of over 1,057 MW of efficient power generation capacity, improvement of overall fleet efficiency from 30% in 2009 to 37% in 2017, 14.2% points reduction in Transmission and Distribution (T&D) losses and most importantly, today over 70% of the city is exempt from load-shed with 100% exemption to industries since 2010. "These measures have proved critical in catalysing economic growth in the city and in Pakistan at large. This virtuous cycle of upgradation, improvement and upliftment is the positive effect of KE reinvesting its profits back into the company, ensuring that we maintain our journey towards becoming even more customer-centric.” KE remains firm in its vision to provide safe, reliable and consistent power to all its customers underpinned by investment of USD 3 billion over the next few years, spanning across the power value-chain, resulting in energy self-sufficiency and propelling the socio-economic growth of Karachi and resultantly Pakistan. A key feature of this investment plan is the move towards cost-effective and efficient sources of generation, including coal, RLNG and most importantly increasing the share of renewables; both solar and wind in line with KE’s overarching priorities to be environmentally sustainable and economically viable for the city’s growth. A key concern for KE, as with other power sector companies, remains the prevailing circular debt situation affecting the sustainability of the sector. As of June 2019, the outstanding receivables of KE have ballooned to PKR 177 billion on account of outstanding payments from various federal and provincial public sector entities and are nearly two times its payables which totals around PKR 99 billion. However, KE’s balance sheet remains healthy, with total assets amounting to PKR 396 billion in FY 17 as compared to PKR 378 billion in FY 16. The Board in recognition of the investment plan by KE across all business verticals decided not to declare any dividend, and to reinvest the profit earned in the business. Over PKR 25 billion has been invested in generation, transmission and distribution during the reporting period. The Board further observed that KE, being Pakistan’s only privatized and vertically integrated power utility, continues to engage with relevant governmental, regulatory and other external entities in order to ensure an enabling and pro-investment environment for the power sector at large and for KE in particular. With collective support from all stakeholders, KE continues to maintain a positive outlook for the future and looks towards profitable and sustainable growth while also strengthening service provision to the customers.