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K-Electric suffers a massive loss of Rs30.98bn in FY23

PACRA assigns initial rating of 'AA' to KEL's debt instrument
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September 15, 2023 (MLN): K-Electric Limited (PSX: KEL) has revealed its financial statements for the year ended June 30, 2023, as per which the company has recorded a substantial loss after tax of 30.98bn (LPS: Rs1.21), compared to a profit of Rs8.52bn (EPS: Rs0.31) in the same period last year (SPLY).

Going by the results, the company's top line grew by 10.52% YoY to Rs382.82bn as compared to Rs346.38bn in SPLY.

Conversely, the tariff adjustment for FY23 fell to Rs136.91bn compared to Rs172.69bn in FY22, depicting a decline of 20.72%.

The cost of sales went up by 3.64% to stand at Rs466.89bn in the respective period compared to Rs450.51bn in SPLY.

This increase is attributed to a jump in both the purchase of electricity and expenses incurred in generation, transmission & distribution to stand at Rs223.16bn and Rs33.74bn in FY23.

Meanwhile, the company's expense of fuel and oil inched down by 1.28% YoY to Rs209.76bn compared to Rs212.49bn in FY22.

The increase in the cost of sales along with the decline in the company's tariff adjustment resulted in a lower gross profit of Rs52.84bn, down by 22.92% YoY against Rs68.56bn in SPLY.

On the expense side, the company observed a rise in impairment loss against trade debt & other receivables by 25.29% YoY and other consumer services and administrative expenses by 15.74% YoY to clock in at Rs31.13bn and Rs24.85bn respectively during the review period.

KEL also witnessed a major increase in other operating expenses, as they grew by 54.05% YoY to Rs14.5bn in FY23.

However, during the review period, other income rose by 21.76% YoY to stand at Rs12.43bn in FY23 as compared to Rs10.21bn in SPLY.

The company’s finance costs surged by 2.29x YoY and stood at Rs34.57bn as compared to Rs15.12bn in FY23, mainly due to higher interest rates.

Due to decreased tariff adjustments, increasing costs of sales, and other operating expenses, the company reported a loss before tax of Rs42.5bn in FY23, compared to a profit before tax of Rs5.57bn in the SPLY.

On the tax front, the company incurred a higher tax rebate worth Rs11.51bn against the Rs2.9bn received in the corresponding period of last year, depicting a rise of 3.98x YoY.

Consolidated (un-audited) Financial Results for the Year ended 30 June 2023  (Rupees in '000)
  June  23 June 22 % Change
Net Revenue 382,824,912 346,384,175 10.52%
Tariff Adjustment 136,907,413 172,686,588 -20.72%
Cost of sales (466,889,773) (450,512,430) 3.64%
Purchase of electricity 223,159,922 207,544,377 7.52%
Consumption of fuel and oil 209,759,088 212,487,554 -1.28%
Expenses incurred in generation, transmission & distribution 33,740,202 30,209,269 11.69%
Other cost of sales 230,561 271,230 -14.99%
Gross Profit 52,842,552 68,558,333 -22.92%
impairment loss against trade debt & other receivables (31,131,302) (24,847,537) 25.29%
Consumer services and administrative expenses (27,560,569) (23,811,539) 15.74%
Other Income 12,428,035 10,206,869 21.76%
Other operating expenses (14,501,250) (9,413,621) 54.05%
Finance cost (34,572,689) (15,122,662) 128.62%
Profit before tax (42,495,223) 5,569,843
Taxation 11,512,307 2,899,471 297.05%
Net profit for the period (30,982,916) 8,469,314
Basic and diluted earnings/ (loss) per share  (1.12) 0.31

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Posted on: 2023-09-15T15:25:15+05:00