Tag: K-Electric

KARACHI: Challenging sociopolitical and macroeconomic factors have had a cascading impact on multiple sectors including KE which grapples with immense challenges during the first half of the fiscal year 2022-2023, said a statement on Tuesday.

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KARACHI: K-Electric unveils a plan to invest Rs484 billion in transmission and distribution business, according to a statement issued on Monday.

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KARACHI: K-Electric, a power utility providing electricity to residential, commercial and industrial consumers of Karachi, is confident of positive outlook despite macroeconomic and geopolitical challenges.

“Despite macroeconomic and geopolitical challenges, KE is confident in serving its customers in a reliable and efficient way through a comprehensive, multi-pronged strategy,” said KE’s Chief Financial Officer Muhammad Aamir Ghaziani at a Corporate Briefing Session held at the Pakistan Stock Exchange (PSX) on November 22, 2022.

READ MORE: K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

Sustained investments in the value chain have driven continued improvement in KE’s core business. Since privatization, KE has been able to reduce its transmission and distribution losses from approximately 34% to 15% at the end of FY22.

The utility’s transmission and distribution (T&D) losses have reduced by 2 percentage points at the end of the first quarter of FY23 compared to the same period last year, while generation efficiency has also improved by 0.6 percentage points during this time. Investment of around PKR 62.8 billion in FY22 and PKR 11.6 billion in first quarter of FY23 has been made across power value chain.

READ MORE: Faysal Bank, K-Electric collaborate to ease customer’s payment

KE is also preparing itself for the future. The panel shared plans to add up to 500 MW of efficient, clean energy in the short term to diversify the company’s fuel mix and lower the costs of electricity for the company and consumers alike. Simultaneously, construction works of Dhabeji and KKI grids are underway to allow KE to receive additional supply of up to 2050 MW from the National Grid.

On the distribution front, the company intends to enhance its infrastructure and continue its efforts to reduce distribution losses by rolling out Aerial Bundled Cables (ABCs) on its network and implement new and reengineered processes for an improved customer experience. 

Speaking at the event, Sadia Dada, Chief Marketing and Communication Officer, also proudly shared KE’s multi-award winning corporate social responsibility strategy, which is driving grassroots development of the communities it operates in.

READ MORE: KE adjusts electricity bills under FCA relief package

The company shared highlights of its efforts including the installation of water filtration plants, renovation of schools and public parks, and setting up of health camps which have collectively benefitted approximately 200,000 persons.

KE’s flagship Roshni Baji Program also completed its 2nd cohort. Collectively 100 women have undergone training as KE’s neighborhood safety ambassadors as well as the country’s first certified female electricians. Collectively, these women have educated over 463,000 households on safe practices for electricity usage, building safer communities.

READ MORE: NEPRA acknowledges KE’s operational performance

Through different other partnerships, women are also being trained in financial literacy, self-defense, motorcycle operations, and CPR training. Continued awareness on safety through public service messaging has reached hundreds of thousands of people across Karachi’s high-risk areas as well.

The briefing also shed light on external factors which affected KE’s financial performance including, demand disruption due to macro-economic factors, receivables from the Government of Pakistan and related entities, devaluation of the Pak rupee resulting in exchange loss, increases in effective rates of borrowing leading to higher finance cost and increases in consumer tariffs which affected customer’s propensity to pay bills resulting in increase in the provision against doubtful debts.

The Company expects some in increase in growth due to shift of captive consumers to grid during the upcoming winter season and is also working diligently on conversion of captive consumers to grid in line with GoP’s policy as well as simplified New Connection process.

Aligned with the mission of brightening lives by building the capacity to deliver uninterrupted, safe and affordable power to Karachiites, KE will continue to make investments across the value chain, enabling the company to improve operationally whilst progressing on the value creation curve through innovation and technological advancements. However, support from government and regulatory authorities remain critical for the execution of the planned investment

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.