The Board of Directors of K-Electric Limited, in its meeting held the other day at KE head office, approved the financial results for the year ended on 30 June 2021. During the period, driven by investments of around PKR 81 billion across the power value chain supplemented by improved economic conditions and revival of economic activity post the COVID-19 lockdown, as well as favorable government policies, the company showed strong operational performance including T and D loss reduction from 19.7% in FY 2020 to 17.5% in FY 2021 and improvement in recovery ratio from 92.1% in FY 2020 to 94.9% in FY 2021.
In its financial results issued to the PSX, KE declared profits of PKR 11,998 million as compared to a loss of PKR 2,959 million during FY 2020 resulting in earnings per share (EPS) of 0.43 rupees per share in FY21 as compared to loss per share of 0.11 rupees in FY20. Increase in total assets has also been observed from 703,414 Million in FY20to 835,677 Million in FY21.
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According to Moonis Alvi, CEO, K-Electric, 'KE's financial results have shown a satisfactory improvement after the last year's drop in profitability due to COVID-19. We are proud that KE's transformation continues to be recognized as a success story of privatization and strengthens our position as a progressive power utility. The reduction in T and D losses and improvement in recovery ratio is yet another reflection of our strong performance, sustained investments in our systems and infrastructure to enhance efficiency and services to our customers. We are engaged with government of Pakistan and other relevant stakeholders for sustainable resolution of circular debt and to receive required regulatory approvals, which will enable us to continue to strengthen infrastructure for enhancing our ability to serve our customers and continue our improvement trajectory.'
It is pertinent to note that the utility company has undertaken various initiatives to increase system reliability and meet the city's growing power demand. On the self-generation front, construction works on the 900 MW RLNG fired project, Bin Qasim Power Station-III (BQPS-III) is progressing on the fast track basis. Upon completion, the power plant, equipped with state-of-the-art technology and at an estimated cost of around USD 650 million, will be among the top 5 most efficient plants in the country. Work on the first unit of 450MW is 90 percent complete while the second phase of 450MW is also proceeding swiftly. In August 2021, KE entered into a Gas Supply Agreement (GSA) with Pakistan LNG Limited (PLL) for the provision of 150 MMCFD RLNG to KE's Bin Qasim Complex.
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Pursuant to successful additional power withdrawal of 450-600 MW from national grid through existing interconnections starting from April 2021, the company has also initiated the process for setting up new grids and interconnections for off-take of further additional power from the National Grid, which will take the total supply from National Grid to 2,050 MW.
During the year, KE enhanced its transmission capacity through the addition of 5 new power transformers along with a 132kV Mehmoodabad Grid Station, which will help in catering to the rapid demand growth from the residential segment in the area. Further, the addition/replacement of power transformers resulted in the net addition of 184 MVAs during the year, taking the total transformation capacity to 6,536 MVAs which is sufficient to meet the peak demand in KE's serviced area. On the distribution front, KE is scaling up its efforts to combat power theft, by installing theft-resistant Aerial Bundled Cables (ABCs). So far around 11,000 PMTs have been converted to ABCs across KE network with full determination to convert the remaining high loss PMTs swiftly and sustainably.
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During FY2021, the company launched the second phase of Project Sarbulandi; a transformational project of approximately PKR 10 billion that focuses on improving network health, minimizing commercial losses through ABC conversion, improving recovery levels, and uplifting areas through community engagement activities. Further, to mitigate power theft and promote a culture of timely bill payments via the provision of easy installment plans, the 'Azaadi' rebate scheme was initiated which played a key role in improving the recovery ratio as mentioned earlier.
K-Electric also launched the first edition of the KHI Awards in FY2021, whereby the company has supported over 30 organizations across various categories which are working for the betterment of the city. The recipients included recognized names such as the Indus Hospital, Hunar Foundation, and others, with the total asset base of the winners standing at PKR 54 billion.
During the year, KE also launched K-Solar, a subsidiary that provides solar energy solutions to industrial, commercial, and residential customer segments with improved access and latest technologies. Moreover, furthering its customer centricity initiatives, in addition to customer facitlitation and interaction platforms, KE also launched complete services for its senior citizens and specially-abled customers via 118 call center.
The power utility remains fully committed to its mission statement of 'brightening lives by building the capacity to deliver uninterrupted, safe, and affordable power' while serving its growing customer base of 3.2 million and more. However a key concern for KE remains the prevailing circular debt situation affecting the sustainability of the sector. Delay in the release of tariff determination of DISCOs including K-Electric, continues to cause accumulation of receivables and adversely impacting the liquidity.