Engro Powergen Qadirpur (PSX: EPQL) announced its financial performance for 2022 yesterday with a decline of around 8 percent year-on-year in earnings.

EPQL’s revenues witnessed a dip of 2 percent year-on-year. The slight decline in revenues was due to weaker utilization primarily on account of maintenance outages, which is a key driving factor for profitability. Despite the flattish revenues and rise in the company’s net margins came under pressure; a key factor for a drop in profits for CY22 was the rise in administrative costs amid rising inflation – and also a decrease in net finance income for the year by around 69 percent year-on-year.

Previously, in CY21, the independent power producer posted a decline in earnings as well. However, EQPL reported a growth in revenues due to higher power dispatch and higher load factor amid rising electricity demand and higher merit order ranking. Despite that, the company witnessed a decline in profits in CY21 due to the absence of the debt repayment component

Besides, EPQL has been facing gas shortage from its Qadirpur gas field as it depletes. As per the Gas Depletion Mitigation Option, the PPIB had allowed EPQL to use RLNG as the comingling fuel with the available Qadirpur permeates gas or High-Speed Diesel (as the case may be). This RNLG was proposed to be supplied by SNGPL on an ‘as and when’ available basis. However, the contract has not been notified by the government which has directed further analysis of the possible options for gas depletion mitigation.