After making losses during last 17 years and after seven years of privatisation, the Karachi Electric Supply Company (KESC) has announced surprising financial results and posted Rs 2.620 billion as profit after tax for the year ended June 30, 2012 (FY12) as compared to after tax loss of Rs 9.393 billion recorded in FY11.
The board of directors of the company in its meeting held here on August 07, 2012 declared that the company's earning per share has increased to Re 0.11 in the period under review against per share loss of Re 0.44 in the same period last year. According to the financial results sent to Karachi Stock Exchange, the company's net sale of energy increased to Rs 92.569 billion in FY12 against Rs 85.926 in FY11, tariff adjustment increased to Rs 70.029 billion against Rs 44.581 billion while rental of meters and equipment increased to Rs 216.748 million against Rs 213.433 million.
In the expenditure account, purchase of electricity increased to Rs 74.657 billion in FY12 against Rs 65.296 billion in FY11while consumption of fuel and oil increased to Rs 58.596 billion against Rs 50.694 billion. The company's expenses incurred in generation, transmission and distribution reduced to Rs 13.301 billion in FY12 against Rs 14.481 billion in FY11. The consumers services and administrative expenses increased to Rs 12.218 billion against Rs 9.814 billion, other operating expenses increased to Rs 910.557 million against Rs 242.523 million while other operating income increased to Rs 7.140 billion against Rs 4.880 billion.
The company posted Rs 2.568 billion as profit before taxation in FY12 against loss before taxation of Rs 10.054 billion in FY11. Due to surprising profits FY12, KESC remained the volume leader on Karachi Stock Exchange on Wednesday with 18 million shares changed hands with the company's share price rising by 85 paisa to close at Rs 4.49.
The KESC on this occasion issued the following statement: "Seven years after privatisation, KESC has achieved an important milestone of becoming a profitable entity. During these seven years, KESC had witnessed an unprecedented USD 1 billion shareholders equity investment, major overhauling of its technical resources, wide ranging capacity and efficiency improvements and an effective management. These much needed interventions have enabled KESC to get back on the sustainability track.
While a profit of PKR 2.62 billion seems insignificant when compared with the financial investment made, it is indeed a step towards a sustainable future. "We are humbled as we achieve this important milestone. This has been made possible with the active patronage of our stakeholders who have always backed us and supported us in our endeavours. We are grateful to our international shareholders who have been very patient and our international and local lenders who entrusted us with their money.
We are also thankful to our people who have worked very hard to make it happen and off course we are thankful to our honest and responsible customers who have always shown their trust in us", said Tabish Gauhar, CEO of KESC. During the last few years, KESC has been successful in arranging substantial funds for its development project from IFC, ADB and OEKB and many local financial institutions. That coupled with the capital injection has enabled KESC to add over 1000 megawatts of new and efficient generation capacity and significantly enhance its transmission and distribution capacities. Efficiency gains have really helped the company improve its operating performance over the last few years.
"This development is significant as our lenders, investors and business partners will have greater faith in KESC's ability to deliver. This will help us position KESC favourably in the investors' community and help us generate funds for our future mega projects. We have to embark on coal conversion and new coal fired projects.
These initiatives are critical because they would ensure availability and affordability of reliable power supply for years to come. A profitable KESC will help us attract the required financial resources from local and international financiers. Our journey continues. Our job is not done yet. We will continue to focus on reduction in cost of generation, reduction in distribution losses and improvement in our quality and service to our customers", said the KESC CEO."
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