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PACRA Assigns Preliminary Ratings to K-Electric Limited – Islamic Commercial Paper-12 upto PKR 3,200 million

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Lahore, September 17, 2020 (PPI-OT): The ratings reflect improved performance metrics of the company. There was significant improvement in the turnover as reflected in the published financial statements for FY19. This led to decent growth in the net profit as well though EBITDA slightly took a dip. Units generated, sent out and sold all of these indicators witnessed rise. T and D losses have also shown improvement. There was rationalization in the trade debts. A significant jump has been noted in the other receivables, primarily due to outstanding balances and tariff differential claims.

Thus for additional cash and to fulfil working capital requirement company is resorting to short term debt avenues. Till date K-Electric has issued a series of eleven Islamic Commercial Papers, among these four ICPs worth PKR 15.7bln are not yet due for redemption while the rest are redeemed timely. Furthermore, K-Electric has also issued a Sukuk bond of PKR 25bln. The company continued to add to its asset base: expansion was noted in plants, distribution and transmission. There has been increased in payable side that is mainly due to power purchase from CPPA-G/NTDC (650 MW) which as per the agreed mechanism are to be adjusted with TDC.

The performance metrics in the ongoing financial year has shown similar trends with more focus on the production and sale of power units. At the same time, upholding business and financial metrics is of utmost importance. The company has bridged its gap in regulatory timeline for the publication of financial statements. The 109th Annual General meeting of K-Electric was held through video conferencing on June 03, 2020.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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