Corporate results: KESC posts Rs1.7 billion profit

Earnings fall because of lesser deferred tax benefit.


Our Correspondent October 29, 2013
KESC’s profit before tax actually jumped to Rs1.5 billion from Rs234 million last year as the country’s only privatised power utility cut fuel oil expenses and gas purchases. PHOTO: FILE

KARACHI: The Karachi Electric Supply Company (KESC) on Tuesday announced a net profit of Rs1.7 billion for July-September quarter, down 24% from last year’s comparable period, mainly because of a lesser deferred tax benefit.

KESC’s profit before tax actually jumped to Rs1.5 billion from Rs234 million last year as the country’s only privatised power utility cut fuel oil expenses and gas purchases.

Net profit appears less than last year’s because of Rs2 billion deferred tax benefit the company got in the same period of 2012.

“Companies can do that until they are in a comfortable position to pay taxes,” said Shahid Ali, Head of Research at Summit Capital.

Though KESC’s revenues, which come from electricity bills charged from consumers, remained almost stagnant at Rs49 billion, the company reduced fuel consumption by 11.6% to Rs19.8 billion. This did not include cost of electricity purchases from Wapda.

Finance cost also saw a decline to Rs2.86 billion from Rs3.4 billion. Other operating income, which includes collection of late payment penalty from consumers, was down 37% to Rs999 million.

KESC, which serves 2.5 million customers, has markedly improved power distribution in Karachi by employing good-customer-gets-good-service policy. Transmission and distribution losses of the company have come down to 27.8% from 36% in 2009.

Published in The Express Tribune, October 30th, 2013.

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COMMENTS (3)

zulfiqar ursani | 8 years ago | Reply Sir I think KESC is doing a remarkable job, I don't know why people don't understand that actually the new management of KESC is saving billions of Rs to Pakistan by better managing this utility company. Other wise if KESC would have been still in the hands of "Sahib log" the government may have to arrange bail out package like for PIA and Steel Mills for KESC also. Rewarding the ones who are diligent in paying their bills is most logical thing a business enterprise should do. The day Nawaz government has taken the power they are after KESC as though it is an Indian company. I am pretty sure in mid 2014 when KESC will start its own generation on coal and will return back the 650MW window to NTDC all these negative comments from political parties like ANP/ML will die down and those who are in favor of doing "bharti " in all government run entities and give free living allowance to their "jialas" on the expense of tax payers like us will fall on their faces and eat dust. Inshallah.
khiwala | 8 years ago | Reply

Running KESC in profit should not be merely the objective of the organisation, as in couple of years their numbers showing reducing generating electricity while making profit from that reduction. However, on the other hand there is hue and cry for long hours load-shedding.. so far Govt also failed to protect its people interest from these money making mind-set. There is no uniform load-shedding in various areas of Karachi hence KESC itself dividing areas into small and big power-theft areas which is very dangerous. KESC should come up with a plan to minimize power-theft through re-engineering its process and producing more electricity using alternative source and investing in the people.

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