Saif Power Reports Significant Revenue Decline Amid Strategic Shifts

Sahiwal: Saif Power Ltd (SPWL) reported a 49% decrease in revenue for the calendar year 2024, as outlined in its recent analyst briefing. The company’s revenue dropped to PkR9.7 billion, attributed to a lower plant utilization rate of 8.23%, compared to 24.6% in the previous year. Despite the decline in utilization, the plant’s availability factor improved to 94.2%, up from 84.6% in 2023.

The company’s net income also saw a decline, with the bottom line falling 60% year-over-year to PkR133 million, translating to earnings per share of PkR0.35. In light of the earnings, Saif Power announced a cash dividend of PkR1.25 per share, a decrease from the PkR4.29 per share dividend in 2023.

Operating a 225MW combined-cycle dual-fuel power plant in Qadirabad, Saif Power utilizes RLNG as its primary fuel and HSD as a backup. The company has recently amended its power purchase agreement, linking its return on equity to a hybrid take-and-pay model and adjusting operation and maintenance costs downward.

In March, Saif Power received PkR5.2 billion in outstanding receivables from the Central Power Purchasing Agency (CPPA-G), but a late payment surcharge of PkR1.36 billion was waived under the new agreement terms. Despite this, receivables have begun to accumulate again, currently ranging from PkR2 to PkR2.5 billion.

The management indicated that any surplus cash would be distributed to shareholders, with the company holding PkR5.2 billion in cash and short-term investments as of March 2025. Saif Power is also awaiting revised tariff approval from NEPRA, which will lead to further discussions with authorities.

Additionally, the company completed the sale of a 96.6% stake in Saif Cement Ltd, realizing full proceeds within the year. Saif Power expressed willingness to engage in the Competitive Trading Bilateral Contract Market (CTBCM), favoring direct transactions with bulk power consumers over exclusive dealings with CPPA-G.

Looking ahead, Saif Power’s management is optimistic about a recovery in power demand in 2025, as macroeconomic factors such as inflation and interest rates improve.