INP-WealthPk

Kohinoor Energy reports sharp capacity factor decline in 1QFY25

January 27, 2025

Shams ul Nisa

Kohinoor Energy Limited, a prominent player in Pakistan's power generation sector, reported a sharp decline in capacity factor to 8.30% during the first quarter of the ongoing fiscal year 2024-25, compared to 33.37% recorded during the same period of FY24, reports WealthPK.

According to the company’s quarterly report, this dramatic decline highlights growing concerns over the sustainability of its operations, particularly in light of reduced electricity dispatch. Kohinoor Energy Limited operates a 124MW furnace oil-fired power plant, but has experienced a substantial drop in electricity production.

During the quarter ended September 30, 2024, the company generated only 22,716MWh of electricity, a sharp decline from 91,366MWh in the same period of the previous year. This reduced output reflects broader challenges in the energy sector, including fluctuating demand and growing competition from alternative energy sources.

The decline in dispatch significantly affected the company’s financial performance. The company’s sales revenues fell dramatically to Rs1.463 billion from Rs3.934 billion in the corresponding quarter last year. Similarly, the net profit decreased to Rs314 million from Rs576 million, leading to a decline in earnings per share from Rs3.40 to Rs1.85.

Additionally, the company did not conduct any major maintenance activities during the quarter under review compared to the two major maintenance efforts undertaken in the same period of FY24. The decision reduced short-term costs of the company but it raised concerns about the long-term efficiency and reliability of operations.

Furthermore, regulatory challenges and liquidated damages imposed by the power purchaser added to the company’s difficulties, creating an uncertain operating environment that hindered its ability to maintain stable performance.

However, despite facing significant challenges, Kohinoor Energy remains committed to meeting its operational goals and maintaining its infrastructure. The management is optimistic about the potential for improved performance as market conditions stabilise and electricity demand increases.

The company remains committed to efficient operations. It’s positioning itself for recovery and reaffirming its role as a key player in Pakistan’s energy sector through strategic adjustments and continued support from partners.

Credit: INP-WealthPk