April 1, 2019 (MLN): Pakistan Credit Rating Agency has maintained entity ratings of Nishat Power Limited at ‘A+’ for long-term and ‘A1’ for short-term, with a stable outlook assigned to the company.
The company runs a 200MW power plant and operates in the regulated power sector. It enjoys sovereign guarantee against receivables from power purchaser – NTDC – given adherence to agreed performance benchmarks.
Topline of the company has increased, majorly owing to upward trend in crude oil prices, despite lower power generation during the period demanded by power purchaser amid to better energy mix. In recent period, receivables including delayed payments interest witnessed an increase.
Moreover, the plant has performed up to the mark with greater availability factor than of its set benchmark. Thus healthy profile of the company should help ameliorate its financial behavior.
Upholding operational performance in line with agreed performance levels would remain a key rating driver. Meanwhile, any significant increase in overdue receivables, as a result of rising circular debt, may negatively impact the ratings.
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