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In the first half of FY23, K-Electric reports a staggering loss of more than Rs. 27 billion.

During the half-year that concluded on December 31st, 2022, K-Electric reported a staggering loss after taxes of Rs. 27 billion, as opposed to a profit of Rs. 3.2 billion during the same period last year (SPLY).

According to the financial statistics disclosed, Pakistan’s largest power provider unexpectedly lost Rs. 10.7 billion between October and December of FY23, a significant decrease from the Rs. 395 million profit in 2QFY22.

In a statement issued by the business, it was stated that the company’s operations and profitability were significantly impacted by rising policy rates, soaring inflation, and decreased economic activity.

K-net Electric’s revenue increased by 9% to Rs. 163 billion in 1HFY23 compared to Rs. 149 billion in SPLY, according to the company’s consolidated figures. Compared to Rs. 184 billion last year, the cost of sales skyrocketed to Rs. 247 billion.

In 1HFY23, the company’s gross profit fell by 43.8%, from Rs. 33.1 billion to Rs. 16.6 billion. External factors that affect consumers’ propensity to pay include rising consumer tariffs and domestic economic conditions.

Due to a decline in economic activity and a rise in the impairment loss against dubious loans, the company saw a 5.7 percent decrease in units sent out. In the first half of FY23, the finance cost increased by 101 percent to Rs. 12.7 billion, primarily due to an increase in the effective rate of borrowing and higher levels of borrowing resulting from government entities’ failure to pay their debts, which have now risen to an alarming level of Rs. 79.6 billion on a net principal basis.

For the half year and the second quarter, the impairment loss against trade debts and other receivables increased by 95% to Rs. 18 billion and Rs. 10.2 billion, respectively. During H1, the company paid taxes of Rs. 2.12 billion.It represents a 12.7% increase above the SPLY payment.

In 1HFY23, K-Electric reported a loss per share (LPS) of Rs. 0.98 as opposed to an LPS of Rs. 0.12 the previous year.

The company’s stock price was trading at Rs. 2.10 at the time of reporting, down 1.87 percent or Rs. 0.04 on Tuesday with a volume of 2.48 million shares.

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