Challenging geopolitical and macroeconomic factors continued to affect several sectors, including K-Electric, which faced enormous challenges in the first quarter of FY23.
rising inflation policy rate hike declining economic activity and unwanted exchange rate changes. It has a significant impact on the operations and profitability of the company.K-Electric out macro economic factors.
The company noticed an 8.9% drop in export units due to lower economic activity, massive exchange losses due to rupee devaluation and additional impairment losses on doubtful accounts.
Increased due to high inflation, rising consumer tax rates, high FCA and current economic conditions affect consumers’ tendency to pay. The additional burden arises from rising financial costs.
This was mainly due to an increase in real borrowing rates and higher levels of borrowing due to non-payment of fees by government agencies, which have risen to an alarming level of Rp 80.4 billion on principal basis. net .
K-Electric operates under the current multi-year tariffs and tariffs effective July 1, 2016. The company does not adjust tariffs for changes in export rates and policy rates.
The factor resulted in a net loss of PKR 16.3 billion for the first quarter of FY23 compared to a net profit of PKR 2.9 billion for the same period for FY22.
Despite these challenges But the company continues to move towards improving its operations. And transmission and distribution losses increased 2% from Q1 FY22 to 15.8% at the end of Q1 FY23. The company’s electricity grid and infrastructure remains flexible and reliable.
during the quarter More than 40,000 meters have been provided to cultivate a culture of metered billing. KE has also increased its support for those affected by the widespread floods after the latest monsoons. K-Electric employees donated 2.7 million PKR from their salaries.
their Under NEPRA’s CSR vision of Power with Prosperity, KE has donated 7.5 million PKR to Akhuwat’s small solar fund which uses 5.7 million PKR to beneficiaries. 35 cases The second group of KE’s Roshni Baji program also graduated.
KE remains committed to addressing the challenges and focusing on further improvements in operations. In addition, the company is continuing to renew the tax rate for the next regulated period. Starting from July 1, 2023, the goal is to achieve a sustainable cost reflection.
and investments that enable tax rates through an equalization mechanism with other energy sector agencies. In addition, the company continues to cooperate with the GoP in solving the problems of government debtors sustainably.
Due to the serious impact on the company’s cash flow and profitability Support from key stakeholders, including governments and regulators, remains essential for KE to ensure reliable and smooth service to consumers with continuity and minimal cost.
