8/9/2019 Afs Present a Ion on Power Sector

1/13

ANALYSIS OF FINANCIAL STATEMENT

POWER SECTOR

8/9/2019 Afs Present a Ion on Power Sector

2/13

OVERVIEW

Pakistan is attempting to restructure the electric power sector to catch up

and keep pace with the gigantic strides the power utility business has

made during the 20th century.

The World is moving towards an integrated electric power system.

Electricity is produced, traded and sold across international boundaries in

many parts of the World.

Pakistan has to immediately start working towards creating an

environment that will not only enable but also attract international

trading in electricity. If we do not keep pace with the changing global

environment, we will be isolated and left even further behind than where

we found ourselves at the end of the previous century.

A first step to creating a climate conducive to investment and economic

development is the need to enunciate a new regime to regulate the utility

business of the future

8/9/2019 Afs Present a Ion on Power Sector

3/13

ABOUT COMPANIES

8/9/2019 Afs Present a Ion on Power Sector

4/13

LIQUIDITY

Particulars KAPCO

JAPAN

POWER HUBCO

KOHINO

OR KESC AVERAGE

2007-8 2007-8 2007-8 2007-8 2007-8

Current Ratio 1.38 0.99 1.04 3.50 0.53 3.41

Acid Test Ratio 1.21 0.90 0.99 2.91 0.44 3.1

Account Receivable

Turn over1.91 5.52 2.51 3.46 2.49 9.94

TotalAsset Turnover 0.98 0.63 1.00 1.01 0.54 2.61

Day's Sales in

Inventory37.15 37.47 36.88 104.16 144.76 111.5

Inventory Turn Over 9.83 7.13 2.51 13.73 3.65 19.47

8/9/2019 Afs Present a Ion on Power Sector

5/13

Solvency

Particulars KAPCO

JAPAN

POWER HUBCO KOHINOOR KESC AVERAGE

2007-8 2007-8 2007-8 2007-8 2007-8

Debt Ratio 0.63 0.78 0.55 0.26 0.13 0.47

Equity Ratio 0.37 3.45 1.20 0.30 0.24 1.064

Times Interest Earned 4.65 0.7 2.32 121.0 214.1 0.93

8/9/2019 Afs Present a Ion on Power Sector

6/13

Profitability

Particulars KAPCO

JAPAN

POWER HUBCO

KOHINOO

R KESC AVERAGE

2007-8 2007-8 2007-8 2007-8 2007-8

Profit Margin 14.24 -3.62 0.04 8.86 -32.77 2.132

Gross Margin 16.71 6.34 0.08 12.94 -27.26 4.626

Return on TotalAssets 13.98 -2.29 0.04 8.90 -17.27 2.346

Return on Common

Stockholders Equity 37.35 -10.17 0.09 9.98 -30.87 5.454

Book Value per Common

Share24.23 10.00 24.60 27.15 7.56 11.766

Basic Earning per Share 9.05 0.05 0.07 0.09 -0.17 1.834

8/9/2019 Afs Present a Ion on Power Sector

7/13

Market Prospects

Particulars KAPCO

JAPAN

POWER HUBCO KOHINOOR KESC AVERAGE

2007-8 2007-8 2007-8 2007-8 2007-8

Price Earning Ratio 5.08 - 13.29 7.03 -1.22 3.43

8/9/2019 Afs Present a Ion on Power Sector

8/13

Reasons

Late finalization of 2002 power policy Late initiation of new projects

Long processing time

Not soliciting new power plants

Reliance of unsolicited proposal

WAPDA was not allowed to install thermal power plants Private sector started taking advantages

Availability of machines in the international market

No serious efforts on effeciency improvement and

energy conservation

Time of day metering system is not up to its strength

Hydropower not comming up

Small hydro power plants are not being taken up by

WAPDA

Closure of some IPP & WAPDAs power plants

Not payment of fuel bills to fuel suppliers

8/9/2019 Afs Present a Ion on Power Sector

9/13

Reasons (contd)

International investors are not comming with

enthusiasm

International recession

Governace issue No serious efforts to exploit alternative energy

resources

Huge reserve of coal is not being used

8/9/2019 Afs Present a Ion on Power Sector

10/13

Issues

Most of the new thermal power plants are basedon fuel oil

Cost of electricity generations

Fuel imports major implecations on forx reseve

Volatility of crude oil prices

Fuel transporation and import infrastructure

Road / railway network

Port facilities

Gas is not available for new power plants

Un efficient energy useage

No incentive from the government to developalternative energy resources

Rental power plant is sucidal

8/9/2019 Afs Present a Ion on Power Sector

11/13

Remedies / Suggestions

Development of alternative energy

The Regulator should be linient in tariff for wind and

solar power plants

Manufacturing facility for wind and solar power plantsbe encouraged by the government

Coal should be used for power generation including

imported Coal

Thermal power plants should be installed by WAPDA inparllel to IPPs

More emphasis should be on energy conservation and

efficiency improvement

8/9/2019 Afs Present a Ion on Power Sector

12/13

Remedies / Suggestions (contd)

Time of day tariff should be implemented in all

catagories of consumers

A digonostic study should be conducted for oil

transporatation infrastructure and port facilities Captive power plant should brougt on bar

Industrial sector should be encouraged to install

their own power plants and surplus should be

purchased by WAPDA at a competitive price

8/9/2019 Afs Present a Ion on Power Sector

13/13

Thanks