KE incurred Rs 31b losses in FY2022-23

KARACHI: The Chief Executive Officer (CEO) of K-Electric Moonis Alvi said that the power distribution authority incurred Rs 31 billion in losses in Fiscal Year 2022-23, ARY News reported.

FY23 was a tough year. Myriad challenging sociopolitical & macroeconomic factors affected multiple sectors including KE. Inflation,policy rate hikes,PKR devaluation & economic contraction impacted operations. Decreased economic activity also reduced units sent out by 7.3%. (1/7) pic.twitter.com/crzUYXJS1v

— Moonis Alvi (@alvimoonis) September 15, 2023

The recently concluded fiscal year was significantly influenced by challenging sociopolitical and macroeconomic factors that have had a cascading impact on multiple sectors including KE.

Surging inflation, policy rate hikes, rupee devaluation and a contraction in economic activity have cast a significant influence on the company’s operations and overall profitability.

Compared with FY22, KE has observed a 7.3% reduction in units sent out due to reduced economic activity. Inflationary pressures and government-mandated increases in the prices of electricity have also impacted customers’ propensity to pay, decreasing KE’s recovery ratio from 96.7% to 92.8% between FY22 and FY23, resulting in an increase in impairment loss against doubtful debts.

An additional burden is being placed by surging finance cost mainly on account of increase in effective rate of borrowing. The Company operates under regulated tariff and as per applicable Multi-Year Tariff, no adjustment is provided to the Company in tariff for changes in sent-out and policy rates.

The aforementioned factors resulted in net loss for the year of PKR 30.9 billion compared with the net profit of PKR 8.5 billion for FY22.