Pakgen Power Limited (PSX: PKGP) announced its financial performance recently on the bourses with a jump in earnings for the latest quarter – 2QCY22 profits increased by over 9 times versus 2QFY21. The independent power producer’searnings for 1HCY22 was seen increasing by 24 percent year-on-year. Also, earnings are lower compared to last year as the discounted tariff has become applicable from first quarter of CY22.
The growth in 2QCY22 revenues was over four times versus 2QCY21, while revenue growth for 1HCY22 was over three times as compared to similar period last year. The growth in revenues came from higher prices as well as higher dispatch of electricity. During the first half of CY22, power plant dispatched 821,210 MHW of electricity as compared to 314,591 MWH dispatched during thecorresponding period oftheprevious year. This was a growth of over 161 percent year-o-year or over 2.5 times.
Similar and simultaneous increase in the cost of sales however ate away the gross profit with gross margins for 1HCY22 slipping to 4.6 percent from 18.6 percent in 1HCY22; gross margins for 2QCY22 were down from 4.3 percent to 2.6 percent. The decline in gross profits was likely due to application of renegotiated terms of the PPA.
Expenses however remained in control for PKGP including administrative, finance and other operating expenses, while growth in other income was due to higher liquidity on PKGP’s books especially in 1QCY22.
The IPP among others has been facign the issue in forex payments for the import of spare parts required for the periodic maintenance of the power plant. the IPPs together under PPIB has requested the SBP for the approval of opening L/Cs for the related matter , which in case of delay could hamper and cause shortfall in power generation and the resultant dispatch of electricity to the grid.
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