KARACHI: K-Electric Limited, the electricity generation and supplier company, has declared huge after tax loss of Rs16.35 billion for the quarter ended September 30, 2022 massive jump of 144 per cent in revenue received through tariff adjustment.
According to consolidated financial results for the quarter ended September 30, 2022, the company announced after tax loss of Rs16.35 billion as compared with the after tax profit of Rs2.88 billion in the same period of the last year.
The company announced earnings per share at 59 paisas for the three months period ended September 30, 2022 as compared with EPS of 10 paisas in the same period of the last year.
Board of directors of KE met on October 28, 2022 to approve the financial results.
The company declared huge losses despite the massive jump in revenue from tariff adjustment. KE received Rs65.97 billion as tariff adjustment for the quarter ended September 30, 2022 as compared with Rs27.22 billion in the corresponding period of the last year, showing an increase of 144 per cent.
Total revenue of the company recorded at Rs154.58 billion for the quarter under review as compared with Rs114.17 billion in the same quarter of the last year.
Cost of sales increased to Rs146.53 billion for three months period ended September 30, 2022 as compared with Rs97.53 billion in the same period of the last year.
Company official said that the difficult socio-political challenge both locally and at international fronts, have had a consequential impact on the macro-economic factors.
The economic impact has reverberated through multiple channels, including commodity and financial markets, surging inflation, increasing policy rates and reduction in economic activity. Impacted by these challenges, the Company has observed a reduction in units sent-out by 8.9 per cent and the gross profitability of the Company declined significantly.
The company operates under regulated tariff and as per current Multi-Year Tariff effective from July 01, 2016, no adjustment is provided to the Company in tariff for changes in sent-out and policy rates. Further, the Company observed increase in exchange loss by PKR 2.6 billion owing to devaluation of Pak Rupee and increase in impairment loss by PKR 4.0 billion against doubtful debts due to high inflation, increase in consumer tariff, high FCA and current economic conditions impacting consumers propensity to pay.
The aforementioned factors along with increase in finance cost by PKR 3.4 billion mainly on account of increase in effective rate of borrowing and higher levels of borrowing due to non-payment of dues by Government entities, translated into the loss after tax amounting to PKR 16.3 billion.
The Company is geared up to face the challenges and focusing extensively on further operational improvements as detailed in the relevant business section and also working diligently for renewal of tariff for the next control period starting from July 01, 2023, with an aim to obtain a sustainable cost reflective tariff with robust adjustments mechanism at par with other power sector entities to ensure continuity of reliable and smooth service to consumers at least possible costs.
