KE’s future outlook remains positive despite current challenges

KARACHI: Despite macroeconomic and geopolitical challenges, the K-Electric (KE) is confident in serving its customers in a reliable and efficient way through a comprehensive and multipronged strategy.

These comments were made by KE Chief Financial Officer Muhammad Aamir Ghaziani at a corporate briefing session held at the Pakistan Stock Exchange (PSX).

Sustained investments in the value chain have driven continued improvement in the KE’s core business. Since privatisation, the power utility has been able to reduce its transmission and distribution losses from approximately 34 per cent to 15 per cent at the end of FY22.

The utility’s transmission and distribution losses have reduced 2 percentage points at the end of the first quarter of FY23, compared with the same period of the last year, while generation efficiency has also improved 0.6 percentage points during this time.

The investment of around Rs62.8 billion in FY22 and Rs11.6 billion in the first quarter of FY23 has been made across power value chain.

KE is also preparing itself for the future. The panel shared plans to add up to 500MW of efficient, clean energy in the short-term to diversify the company’s fuel mix and lower the costs of electricity for the company and consumers alike.

Simultaneously, the construction works of Dhabeji and KKI grids are under way to allow KE to receive additional supply of up to 2,050MW from the national grid.

On the distribution front, the company intends to enhance its infrastructure and continue its efforts to reduce the distribution losses by rolling out Aerial Bundled Cables (ABCs) on its network and implement new and reengineered processes for an improved customers’ experience.

Speaking at the event, Sadia Dada, chief marketing and communication officer, also proudly shared KE’s multi-award winning corporate social responsibility strategy, which is driving the grassroots development of the communities it operates in.

The company shared highlights of its efforts, including the installation of water filtration plants, renovation of schools and public parks and setting up of health camps, which have collectively benefitted approximately 200,000 persons.

KE’s flagship Roshni Baji programme also completed its 2nd cohort. Collectively, 100 women have undergone training, as the KE’s neighbourhood safety ambassadors, as well as the country’s first certified women electricians. Collectively, these women have educated over 463,000 households on safe practices for electricity usage, building safer communities.

Through different other partnerships, women are also being trained in the financial literacy, self-defence, motorcycle operations and CPR training.

Continued awareness on safety through the public service messaging has reached hundreds of thousands of people across Karachi’s high-risk areas, as well.

The briefing also highlighted the external factors, which affected the KE’s financial performance, including the demand disruption due to macroeconomic factors, receivables from the government of Pakistan and related entities, rupee depreciation, resulting in exchange losses, an increase in effective rates of borrowing leading to higher finance cost and an increase in the consumer tariffs, which affected the customers’ propensity to pay bills, resulting in an increase in the provision against doubtful debts.

The company expects some increase in growth due to a shift of captive consumers to grid during the upcoming winter season and is also working diligently on the conversion of captive consumers to grid in line with the government’s policy, as well as simplified new connection process.

Aligned with the mission of brightening lives by building the capacity to deliver uninterrupted, safe and affordable power to the Karachiites, the KE will continue to make investments across the value chain, enabling the company to improve operationally, while progressing on the value creation curve through innovation and technological advancements. However, the support from the government and regulatory authorities remain critical for the execution of the planned investment.