Net loss of Karachi Electric Supply Company (KESC) has reduced to Rs 2.835 billion in the six-month period ended December 31, 2011 as compared to a loss of Rs 3.115 billion in the corresponding period in 2010. The company's per share loss stood at Re 0.13 in the period under review against Re 0.16 in the same period a year back.
The board of directors of the company in its meeting held here on February 20, 2012 approve issue of 9.20 percent right shares, subject to approval of SECP, ie fourth six ordinary right shares for every five hundred ordinary shares held by the shareholders at par, ie Rs 3.50 per share. The right issue shall rank pari passu with the existing ordinary shares of the company in all respect.
"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 stakeholders", the company, in an information sent to Karachi Stock Exchange on Tuesday said.
The injection of economic and efficient generation in KESC system and implementation of system improvement and loss reduction projects will improve operational financial viability and profitability of the Company, it added. 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 borrowing and resultant financing cost", the company said.
According to the financial results, the KESC's net sale of energy increased to Rs 45.074 billion in the half year period ended December 31, 2011 against Rs 42.612 billion in the same period last year. The tariff adjustment increased to Rs 27.944 billion against Rs 18.543 billion while rental and meters and equipment increased to Rs 107.876 million against Rs 106.316 million.
In the expenditure, purchase of electricity increased to Rs 35..307 billion against Rs 28.793 billion while consumption of fuel and oil increased to Rs 27.173 billion against Rs 23.313 billion. The transmission and distribution expenses reduced to Rs 6.950 billion against Rs 7.469 billion.
The company's administrative expenses increased to Rs 5.698 billion against Rs 4.913 billion, other operating income reduced to Rs 2.138 billion against Rs 2.326 billion while other operating expenses reduced to Rs 104.774 million against Rs 140.319 million. The company's loss before taxation stood at Rs 3.152 billion in the half-year period in 2011 against Rs 3.580 billion in the same period in 2010. On quarterly basis, the company's net loss reduced to Rs 632.928 million in the quarter ended December 31, 2011 against a loss of Rs 1,526.012 million posted in the same quarter in 2010.