Saif Power struggles in life outside guaranteed returns contracts

Saif Power Ltd (SPWL) began calendar-year 2025 with what at first glance looks like a respectable rebound. First-quarter net turnover rose 40% year-on-year to Rs1.49 billion, yet the surge in fuel and maintenance costs meant cost of sales almost doubled (+99%) and the gross margin collapsed from 43% to 19%. After finance costs, the company eked out only Rs36 million in net profit – just 2.4% of revenue – even though that figure is 16-times the Rs2 million booked a year earlier.

Look further back and the picture is no prettier. Full-year 2024 revenue halved to Rs9.67 billion from Rs19.04 billion in 2023 as plant utilisation sank to an abysmal 8.23%, despite an impressive 94.2% availability factor. In other words, the 225 MW combined-cycle plant was mechanically ready but seldom dispatched by the grid operator.

The perpetual curse of Pakistan’s independent power producers – ballooning receivables from the Central Power Purchasing Agency (CPPA-G) – is back with a vengeance. Although a landmark settlement in early 2025 released Rs5.2 billion of overdue invoices, receivables had already rebuilt to between Rs2 billion and Rs2.5 billion by May . As of 31 December 2024, the figure still stood at Rs8.2 billion, even after management voluntarily waived Rs1.36 billion in late-payment interest to secure the deal.