Lahore, August 09, 2019 (PPI-OT): K-Electric has lately published the annual report for the year ended 30th June, 2017. The company’s net profit took dip during FY17 as compared to last year owing to significant reduction in tariff level along with the change in tariff structure. The operational parameters and the related data reflect improved performance going forward. The number of consumers have taken a growth of ~10% during FY19 as compared to FY18. The recovery ratio of the company, which reflect, amount received against amount billed, has taken almost percentage point improvement during FY19.
Hence, the profitability and cashflow position of the company are expected to take a positive impact. The challenge faced by the industry is prevailing circular debt. As of May, 2019 the Company’s gross receivables from various Federal and Provincial public sector entities stand at PKR 177bln and are nearly two times the Company’s payables which total PKR 99bln. The company has not accrued markup on its payable to government controlled entities.
The management view is that the markup on these outstanding liabilities will be payable only when it receives markup on its own outstanding receivable balance on account of tariff differential claims and energy dues of the company’s public sector consumers. This has resulted in an increase in the company’s borrowings. The overall leverage indicators reflect manageable position. The external settlement of the pending issues is important, going forward.
The company is creating different avenues to fund it’s enhanced needs of its working capital, the recent leg of which is ICP-A (amounting to PKR 8bln). In application to PSX dated May 28th 2019, K-Electric informed that following the withdrawal of case before the Sindh High Court, Ministry of Energy (MoE) has notified long standing MYT on May 22nd, 2019 for the period of seven years applicable from July 1st, 2016 to June 30th, 2023. However, the AGM for approval of accounts for the year ended 30th June, 2018 to be held, with SECP’s direction.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Category: General Business News