June 24, 2024 (MLN): Pakistan Credit Rating Agency Limited (PACRA) has maintained entity ratings of Narowal Energy Limited at "AA-" for long term and "A1+" for short term with a stable outlook forecast, latest press release issued by PACRA showed.
The ratings reflect the strong business profile of Narowal Energy Limited (Narowal Energy or the Company) emanating from the demand risk coverage under the Power Purchase Agreement (PPA) signed between CPPA-G and the company.
Meanwhile, the Implementation Agreement provides a sovereign guarantee for cash flows, given adherence to agreed performance benchmarks (Availability: 96%, Efficiency: 45%).
The ratings incorporate low operational risk due to in-house O&M undertaken by Hub Power Services Limited (HPSL), an associated company and adequate insurance coverages.
During the period, 9MFY24 Narowal Energy provided 179GWh (9MFY23 ~321GWh) of electricity to the national grid and recorded sales revenue of Rs12.5 billion (9MFY22 Rs16.224bn), representing a lower demand from the power purchaser.
The Company successfully paid off its Long-Term project-related debt in 2021 resulting in a favorable impact on its financial risk profile.
As on March 2024, the debt profile majorly comprises short-term borrowings, which have been availed to meet working capital requirements, mainly due to delayed payments from the off-taker.
The long-term facility of Rs2.5bn has also been arranged against which the company is making timely repayments.
The announcement of the second interim dividend for FY24 at Rs.7.65 per share echoes the strong equity base of the company.
The sound financial profile of Hubco; the holding company, provides comfort to the ratings. Adherence to good financial discipline towards both financial and commercial obligations would remain important.
Meanwhile, upholding strong operational performance in line with agreed performance levels remains essential.
Copyright Mettis Link News
Posted on: 2024-06-24T10:22:08+05:00
