K-Electric’s profit jumps 16% to Rs32.75 billion in FY17

Published: August 10, 2017
The K-Electric logo is seen at their head office in Karachi, Pakistan, January 31, 2017. PHOTO: REUTERS

The K-Electric logo is seen at their head office in Karachi, Pakistan, January 31, 2017. PHOTO: REUTERS

KARACHI: K-Electric’s profit increased 16% to Rs32.75 billion in the year ended June 30, 2017 on the back of higher self-generation at a reduced fuel cost and lower finance cost, according to a bourse filing on Wednesday.

The integrated power company had posted a profit of Rs28.32 billion in the previous year.

Accordingly, its earnings per share (EPS) rose to Rs1.19 in FY17 from Rs1.03 in the previous year.

K-Electric is a listed firm at the Pakistan Stock Exchange. Its share price increased 2% or Rs0.14 to Rs7.05 with a volume of 14.75 million shares.

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The company reported to the PSX that it purchased electricity worth Rs54.30 billion from the national grid station and independent power producers in FY17. This was 24% lower than the Rs71.48 billion paid to the power sellers last year.

Similarly, it consumed fuels worth Rs57.26 billion compared to Rs59.95 billion in the previous year.

The drop in the value of purchased power and fuel consumption at a time of low oil prices in international and domestic markets suggested higher self-generation by the company.

Finance cost fell by half to Rs5.09 billion from Rs9.75 billion in FY16. This indicated that the firm was having higher working capital amid low input costs.

On the flip side, sales of electricity in value terms remained flat at Rs189.62 billion compared to Rs190.35 billion last year.

K-Electric sold energy worth Rs166.74 billion, which was 12% higher than Rs148.51 billion in FY16. However, tariff adjustment for end-consumers on account of fuel cost resulted in flat sales.

Moreover, its consumer services and administrative expenses shot up 41% to Rs30.71 billion from Rs21.73 billion.

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Topline Securities said K-Electric’s earnings in the last (April-June) quarter dropped 1% to Rs10 billion (EPS Rs0.4).

Sales grew 11% on a year-on-year basis to Rs56.5 billion in the quarter on the back of higher supply of units owing to warm weather.

Gross profit improved 12.7 percentage points to 35%. “The improvement can be attributed to higher self-generation of electricity, leading to lower electricity purchase from more expensive external sources and higher thermal efficiency,” it said in a note to its clients.

Published in The Express Tribune, August 10th, 2017.

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