The loss after tax of Karachi Electric Supply Company (KESC) has declined to Rs 14.641 billion in the year ended June 30, 2010 (FY10) as compared to Rs 15.484 billion in the same period in FY09. The company''s loss per basic share stood at Re 0.74 in the period under review against Rs 1.18 in the same period last year. The company''s loss per diluted share reduced to Re 0.66 against Re 0.98.
The board of directors of the company in its meeting held here on Thursday recommended issue of 7.80 percent right shares ie thirty-nine (39) ordinary right shares for every five hundred ordinary shares held by the shareholders at par ie Rs 3.50 per share subject to approval of Securities and Exchange Commission of Pakistan (SECP).
Regarding the purpose of the right issue, the company said that the right shares are being issued to provide fresh equity which will support the capital expenditure requirements, improve debt equity and liquidity ratios, reduce finance cost and will improve profitability of the company to benefit all the shareholders.
The company said that injection of economic and efficient generation in KESC system and implementation of system improvement and loss reduction projects will improve operational and financial viability and profitability of the company. Partial funding the said projects through additional equity will reduce financing cost and positively contribute to future financial results of the company.
The fund generated through right shares will be utilised to partly finance equity component of new generation projects and capex requirement to augment and expand dilapidated transmission and distribution network and system improvement and loss reduction projects and to meet working capital deficit to reduce bank borrowings and resultant financing cost.
According to the financial results sent to Karachi Stock Exchange (KSE), the company''s net sales of energy increased to Rs 70.508 billion in FY10 against Rs 58.069 billion in FY09. The tariff adjustment revenue increased to Rs 33.220 billion against Rs 26.950 billion while the rental of meters and equipment increased to Rs 208.309 million against Rs 204.553 million.
In the company''s expenditure, purchase of electricity increased to Rs 59.881 billion against Rs 44.921 billion while consumption of fuel and oil declined to Rs 37.180 billion against Rs 37.450 billion. The company''s expenses incurred in generation, transmission and distribution increased to Rs 10.925 billion against Rs 9.484 billion.
The company''s consumers services and administrative expenses increased to Rs 8.378 billion against Rs 5.370 billion, other operational expenses increased to Rs 4.751 billion against Rs 2.485 billion. The company''s other operating income declined to Rs 235.002 million against Rs 343.585 million. The company finance costs increased to Rs 6.823 billion in this fiscal year against Rs 5.589 billion in the previous financial year. The company''s loss before taxation stood at Rs 14.737 billion in FY10 against Rs 15.451 billion in FY09.
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