The Board of Directors of K-Electric Limited recently approved the company’s financial results for the year ended June 30, 2020.
As per the results issued to the PSX, K-Electric declared a loss of Rs2.96 billion for FY20 in glaring contrast to a profit of Rs17.274 billion during the same period last year. This is primarily on the back of accumulated government receivables and delayed determination of tariff variations which have severely impacted working capital requirements of the company and driven up finance costs by 166pc to Rs16.737 billion vs. Rs6.285 billion in FY19.
In spite of these financial challenges in the backdrop of Covid-19 pandemic, over Rs55 billion have been invested by the company across the generation, transmission and distribution businesses.
Both, industrial and commercial consumption reduction on account of Covid-19 lockdown and load-shed exemption for high-loss areas coupled with the mobility restrictions for theft detection activities, impacted the sales mix of the company. However, despite these constraints brought on by the pandemic, T&D losses were kept within control, showing a marginal increase of 0.60pc in FY20 compared to the previous year.
Similarly, sales growth of 0.5pc was witnessed during FY20. Before Covid-19 spread accelerated, up until March 20, 2020, the company had shown even stronger operational performance with 3.1pc growth in units sent-out as well as 2pc T&D loss reduction, year-on-year.
According to K-Electric Moonis Alvi, “The year under review was unprecedented in more ways than one with the Covid-19 lockdown during which we provided uninterrupted power focusing on serving vulnerable consumer segments. Despite the mounting financial strain on the company because of pending govt receivables, KE continues to focus on the future and the city’s energy security. The company’s $650 million BQPS-III project is on course and the first unit is expected to come online by summer of 2021, with successful completion of the project by year-end. The company has also accelerated investment in interconnection facilities necessary to evacuate additional power from the national grid to ensure increased availability of power for next summer.”