THE EXPRESS TRIBUNE, KARACHI, 11th SEPTEMBER 2013:
The Karachi Electric Supply Company (KESC) on Tuesday posted a 156% increase in profit for fiscal year 2012-13, which ended in June, as the company continued its relentless drive to recover bills and reward good customers with uninterrupted power supply.
It didn’t announce any dividend with the financial results released to the Karachi Stock Exchange.
KESC’s profit surged to Rs6.728 billion from Rs2.62 billion in the previous year, primarily because revenue grew faster than the main head of fuel cost.
The only privately owned power supplier in the country, KESC generates electricity and also runs a vast transmission and distribution system.
Its revenue was up 16% to Rs189.998 billion whereas cost of fuel and power purchase from the national grid rose 9.77% to Rs146 billion.
The company was able to restrict expenses on maintaining transmission and distribution lines to around Rs13 billion.
KESC has embarked on a cost-cutting campaign, which includes better utilisation of human resource and replacing old copper wires with other material. Copper wires are prone to theft, which often results in power breakdown.
Summit Capital Head of Research Shahid Ali said there are two main reasons for the good performance.
“First, KESC is bringing down line losses. For that purpose, it has distributed the city into zones and matches bill payments against power units sold. Then it does everything possible to make up for the difference. The other reason is deferred taxation.”
KESC’s other income came down to Rs5 billion, down from Rs7 billion as it was not able to record interest income on delayed payments in the last quarter following an official order.
The company has posted profit despite payment disputes with fuel suppliers.