KARACHI: Continuing the momentum of FY21, K-Electric has demonstrated sustained improvement in key operational indicators in the first quarter of FY22 ended September 30, 2021, resulting in a net profit of PKR 2.9 billion.
These interim financial results were approved by KE's Board of Directors on Thursday. These results have been achieved on the back of PKR 10.6 billion investments across the power value chain coupled with reduction of 3.1 percent points in Transmission and Distribution Losses.
The power utility has been making concerted efforts to support the development of its geographies through targeted interventions to curb transmission and distribution losses. As of Q1 FY22, over 11,500 Pole Mounted Transformers (PMTs) have been converted to Aerial Bundled Cables (ABC). Within this quarter, the company has also issued around 38,000 Low Cost New Connections as part of its commitment to transition consumers from illegal means of acquiring electricity to regularized connections ensuring consistent, reliable, and safe power supply. These investments are improving the company's decision-making ability through increased visibility on the patterns of electricity consumption across its diverse consumer base.
Furthermore, multiple facilitation schemes have been introduced for customers to nurture a culture of timely bill payments including tailor-made Area Specific Rebate Schemes for locations in Karachi faced with chronic law and order problems. At the same time, KE is also digitizing its bill payment platforms through strategic partnerships with financial institutions to support the same through debit and credit cards.
KE is also investing today to secure Karachi's energy future. Construction work on the 900 MW RLNG-fired project (BQPS-III) is progressing swiftly despite the prevailing pandemic situation. Testing and commissioning works on the associated grids planned with the power plant are also in progress. In August, KE signed an RLNG Supply Agreement (GSA) with Pakistan LNG Limited (PLL) securing the supply of 150 mmcfd of gas for the complex. Regular maintenance and optimization activities are also carried out across KE's entire generation fleet to maintain the efficiency of generation for Karachi's growing demand. Further, KE has enhanced its net transmission capacity by 110 MVAs for a total of 6646 MVA. These additions are complementing the construction of a 220 kV interconnection at Dhabeji and the planned construction of a 500 KV KKI Grid, which will enable KE to draw additional power from the National Grid up to 2050 MW in future.
The power utility is also driving the agenda on the United Nations Sustainable Development Goals. The first phase of KE's Roshni Baji Neighborhood Women Ambassador Programme ended in July 2021, which inducted 40 women from across Karachi to conduct doorstep visits educating households on safe practices for electricity usage. Since their induction in February, these women have reached around 108,000 homes and undergone approximately 8000 man-hours of training to graduate as the first cohort of trained and certified female electricians capable of completing the internal wiring of a premises on a single-phase supply. The Roshni Baji Project is also a finalist for the S&P Global Platts Global Energy Awards in the CSR - Diversity Category. Under NEPRA's vision of achieving a COVID-Free Pakistan, KE also partnered with Government of Sindh and local NGO HANDS to launch a mobile vaccination drive providing free access to vaccines for Karachi's citizens in remote areas.
Safety awareness remained a core priority for the company during the extended monsoon season. A Safety Roadshow moved around 200 areas of Karachi impacting approximately 200,000 individuals, and collaborations with frontline emergency providers such as Edhi, Chippa and Sarim Burney Trust enabled the company to extend the reach of its messages to the masses. KE also became the first power utility to launch a live stream through its social media platforms as a centralized source of timely updates regarding power restoration efforts during the monsoon season along with consistent messaging on safety.
Commenting on the occasion, CEO K-Electric Moonis Alvi expressed his happiness at the progress, stating "Our vision for Karachi is hinged on a focus on uplifting our communities and driving growth, progress, and safety at a grassroots level. Our consumers are at the heart of our business decisions and we endeavor to provide a safe and reliable supply of electricity across our operational territory. This will have a multiplier effect on the economy and also on developing social capital in our geographies. We appreciate the continued support and guidance that we are receiving from the Federal Government and associated ministries as well as NEPRA, and look forward to resolution of key pending issues which will create an enabling environment for us."
In this regard, Mr. Alvi also cautioned that the operational and financial sustainability of the company depends on the amicable and expedient resolution of long-standing issues. These include the settlement of net receivables from various Federal and Provincial entities which stand at around PKR 58 billion on principal basis and continue to have a consequential impact on the Company's cash flow position. He expressed his confidence in the ongoing discussion on finalizing the Terms of Reference (TORs) for arbitration and the parallel process of streamlining Tariff Differential Subsidy (TDS) Agreements with the Government for timely release of KE's Tariff Differential Claims.
The company is also engaged with NEPRA on the Mid-Term Review petition filed in March 2020 which is under the regulator's determination and approval of recovery loss claims. Continued investments across the power value chain require that necessary investments and costs be allowed in the tariff, and KE is hopeful that the regulator will make a decision that is in the greater interest of 3.2 million consumers in Karachi.
Supporting the expected transformation of the regulatory landscape with the implementation of a wholesale electricity market, KE has submitted its detailed Evaluation and Integration plan after consultation with relevant stakeholders, sharing that a successful implementation can be ensured with an orderly transition in line with the National Electricity Policy 2021 and Cabinet Committee on Energy (CCoE) approved principles.
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