overview of kot addu power company ltd · iso 9001:2015 (quality management system) iso 14001:2015...

Overview of Kot Addu Power Company Ltd2

Operational Performance3

Financial Performance4

Questions & Answers5

Power Sector Overview1

Index

Pakistan Power Sector – State of the Industry

During last 5 years, over 10,000 MW of power generation has been added in the system, however, overall energy

planning remained integrated across the energy supply chain, with little focus on reducing losses and upgrading

Transmission and Distribution capacity, causing consistent increase in Circular Debt.

As at 31-Dec-18

Source: NTDC IGCEPDuring 2018-19, KAPCO generated 7.8% of total generation by IPPs and

12.5% of total generation on RLNG

Bagasse1%

Gas11%

Wind4%

FO17%

Solar1%

RLNG22%

Imp. Coal8%

Nuclear4%

Hydro32%

Hydel26%

Coal13%

Bagasse1%

F.O.7%

Gas18%

Solar1%

RLNG23%

Mixed1% Nuclear

7%

Wind3%

Fuel Wise Installed Capacity Fuel Wise Generation (2018-19)

Pakistan Power Sector – Key Challenges

Circular Debt

Discrepancies in tariff regime

Unbudgeted Govt.

subsidies

Poor Revenue

Collection by DISCOs

Expensive fuel mix

T&D losses and Theft

Measures against Circular Debt

• Resolving the liquidity issue by issuing sukuks / long

term bonds

• Targeting the theft cases on war footing basis

• Upgrading transmission & distribution infrastructure

• Proper budgeting / planning of Govt. subsidies

• Focusing on reforms in regulatory bodies (Bilateral

Market)

• Improving fuel mix by focusing on green energy

• Improving law and order situation to increase recoveries

• Energy Sukuk-II of Rs 200 billion in pipeline

• Govt. committed to eliminate Circular Debt by Dec-2020

• Monthly pile-up of circular debt reduced from ~ 40b to ~

20b




Questions & Answers.5


Overview of KAPCO

Largest Single IPP and

Combined Cycle Plant

in Pakistan

Only Tri-Fuel Power

Plant

Best example of

Public Private

Partnership

~4% of Country’s

Generation *

Ability to self start in

country wide blackout

Ownership of 132 KV

and 220 KV grid

stations

~8% of IPPs

Generation *

Total Revenue > Rs 84

Billion *

No of shareholders >

57,700

(Market Cap. Rs 30B)

Among Highest

Dividend Yield

Companies

Block 1 – 4 Gas Turbines & 2 Steam

Turbines

GT3100 MW

Fiat TG

50

STG 9100 MW

ABB

DK2056

GT1100 MW

Siemens

V94.2

GT4100 MW

Fiat TG

50

STG 10100 MW

ABB

DK2056

GT2100 MW

Siemens

V94.2

Block 2 – 4 Gas Turbines & 2 Steam

Turbines

GT6100 MW

Alstom

9001E

STG 11100 MW

RATEAU

VEGA209

GT5100 MW

Alstom

9001E

GT8100 MW

Alstom

9001E

STG 12100 MW

RATEAU

VEGA209

GT7100 MW

Alstom

9001E

Block 3 – 2 Gas Turbines

& 1 Steam Turbine

GT 14130 MW

Siemens

V94.2

STG 15140 MW

Siemens

GT 13130 MW

Siemens

V94.2

* For the year 2018-19

The Power Plant is

located in the district

of Muzaffargarh, 90

km from Multan in the

province of Punjab

Strong Shareholder Base

Out of 8 directors 3 are from WAPDA

WAPDA provides knowledge and experience in Pakistan power industry

Key shareholders included renowned financial institutions, insurance

companies and other renowned individual investors.

Foreign corporate entities/individuals hold 6.7% shares of the

Company.

Total shareholders of the Company as on 30-Jun-19 are 57,702

Shareholding structure Remarks

Shareholding pattern as of 30-Jun-19

In 1996, WAPDA divested its 36% holding to National Power of UK

through International Competitive Bidding

In 2005, another 18% shares were sold to general public through IPO

In 2012, strategic investor sold its entire shareholding to local

investors

As of today, WAPDA stands as the single largest shareholder with ~

40.25% stake

WAPDA40.3%

ABL9.9%

HBL2.4%

UBL7.9%

MCB1.8%

Others32.4%

BESOS5.5%

IMS Accreditations:

ISO 9001:2015 (Quality Management System)

ISO 14001:2015 (Environmental Management System)

OSHAS 18001:2007 (Occupational Health & Safety)

KAPCO Power Complex 10 Gas Turbines, 10 HRSG, 5 Steam Turbines

27 Oil Storage Tanks (Total Capacity ~ 200KT)

6 FOTPs

State of the art workshops

Switch Yards

Black Start Diesel Generator

KAPCO Residential Complex

Over 800 Houses

2 Community Centres

3 Mosques, 2 schools

2 Markets, Guest Houses

Cricket/ Football Grounds

Corporate Social Responsibility

• Free medical and eye camp for needy persons (3000 to 4000 persons)

• Rehabilitation and maintenance of Govt. schools in Kot Addu area

• KAPCO Iftar Dastarkhwan for needy persons during month of Ramadan

• Supply of Medical Equipment to THQ Hospital, Kot Addu

• Scholarship to students of IBA, Karachi

• Donations to various renowned charitable institutions

• Tree plantation for Green Pakistan

Technical Performance

6,479 6,934

6,583

7,335 7,437

4,961

55.159.0

55.8

62.4 63.3

42.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

PER

CEN

TA

GE

GW

HNET OUTPUT

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

4.812.3 15.8

34.2

56.671.0

92.8 84.2 80.8

62.6

42.428.7

2.4 3.5 3.3 3.2 1.0 0.3

FUEL MIX (GENERATION)

Gas FO HSD

80.2

85.5

81.9

84.3

86.0

91.8

74.00

76.00

78.00

80.00

82.00

84.00

86.00

88.00

90.00

92.00

94.00

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

PER

CEN

TA

GE

COMPLEX AVAILABILITY

43.7

44.2

44.0

43.7

44.0 44.0

43.40

43.50

43.60

43.70

43.80

43.90

44.00

44.10

44.20

44.30

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

PER

CEN

TA

GE

COMPLEX THERMAL EFFICIENCY

Financial Performance

8.78

11.1310.31 10.73

12.06

14.90

7.25 7.75

9.00 9.05 9.10

6.30

0

2

4

6

8

10

12

14

16

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

RS.

PER

SH

AR

E

EPS DPS

Revenue & Generation Dividend Payout

Gross Profit vs Net Profit

12,204

15,146

13,40814,180

13,37914,205

7,730

9,7999,071 9,447

10,617

13,112

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

RS.

IN M

ILLIO

N

Gross profit Net profit

95,834

83,784

46,528

64,024

73,964

64,693

17,372 17,696 17,651 17,823 17,952 20,138

6,479 6,934

6,583

7,335 7,437

4,961

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

-

20,000

40,000

60,000

80,000

100,000

120,000

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

GW

H

RS.

IN M

ILLIO

N

EPP CPP Net Output

15,994 14,894 12,759 11,047 8,663 6,755

79,358 81,369 79,454 104,953

129,783 132,512

26,788 29,729 30,955

32,503

35,093 41,161 63,427 62,473 58,312

81,295

100,605 96,319

5,137 4,060 2,946

2,203

2,749 1,787

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

RS.

IN M

ILLIO

N

Non Current Assets Current Assets Equity

Current Liabilities Non Current Liabilities

Financial Performance – Balance Sheet

Balance Sheet Breakup Last 6 Years

Non Current Assets, 6,755

Current Assets, 132,512

Equity, 41,161

Non Current Liabilities, 1,787

Current Liabilities, 96,319

• Current Assets mainly include Receivable from Off-Taker,

• Current Liabilities mainly include payable to fuel suppliers and banking facilities

Balance Sheet Breakup 30-Jun-19

Financial Performance: 2019 vs. 2018

Reasons for variance in net profit:

Exchange Rate Indexation due to significant depreciation of the Rupee also impacting true-up income

Lower repairs & maintenance costs

Higher net finance income due to higher receivables during the year partially offset by higher finance

cost to banks and fuel suppliers

Rs. in million 2018-19 2017-18 % Change

Revenue - EPP 64,693 73,964 13%

Revenue - CPP 20,138 17,952 12%

Total Revenue 89,792 99,353 -10%

Gross Profit 14,205 13,379 6%

Gross Profit % 16.7% 14.6% 15%

Net Profit 13,112 10,617 23%

Net Profit % 15.5% 11.6% 34%

EPS (Rs / Share) 14.90 12.06 23%

KAPCO – Key Challenges

WAPDA imposed Liquidated Damages (LDs) on Company

amounting to Rs. 27.7 billion treating it as ‘Forced Outage’

due to Non-availability of fuel

LDs Period: Jul-2008 to Sep-2015

KAPCO disputed LDs based on the premise that failure to

dispatch was resultant of non-payment by WAPDA to procure

fuel. KAPCO started Arbitration process as per terms of PPA.

Partial award received in Jun-19 wherein ICC Tribunal decided

that it had jurisdiction over WAPDA and regular hearing of the

case will continue between WAPDA and the Company.

KAPCO and its legal teams are confident that the matter will

be settled in its favour.

PPA Renewal Liquidated Damages

Current PPA of KAPCO is for 25 years, expiring in Jun-2021

As per stipulations of PPA relating to renewal, Company

has taken-up the matter for a new or renewal/extension

of PPA with WAPDA and other relevant quarters of the GoP.

Currently, Govt. is in process of implementing reforms and

formulating a new energy policy for issuance and renewal

of PPAs.

Under new policy, a merchant market contracts regime on

competitive pricing mechanism (Take-and-Pay) is

expected

The terms and conditions under new policy are not yet

clear

KAPCO plant is capable of running beyond 2021.

Additionally NTDC in its Indicative Generation Expansion

Plan 2018-40 has also shown the requirement of

generation from KAPCO beyond 2021.

The information contained in this

presentation is given without any

liability whatsoever by KAPCO or their

respective members, directors, officers

or employees (collectively “KAPCO") for

any loss whatsoever arising from any use

of this presentation or its contents or

otherwise.

No representation or warranty, express

or implied, is made or given by KAPCO

as to the accuracy, completeness or

fairness of the information or opinions

contained in this presentation. In

particular, no representation or

warranty is made that any projection,

forecast, calculation, forward- looking

statement, assumption or estimate

contained in this presentation should or

will be achieved. There is a substantial

likelihood that at least some, if not all,

of the forward-looking statements

included in this presentation will prove

to be inaccurate, possibly to a

significant degree.

Nothing contained herein should be

deemed to be a prediction or projection

of future performance.

The information contained in this

presentation does not constitute

investment, legal, tax or accounting

advice. Recipients of this presentation

should conduct their own due diligence

and other enquiries in relation to such

information and consult with their own

professional advisors as to the accuracy

and application of the information

contained in this presentation and for

advice relating to any legal, tax or

accounting issues relating to a potential

investment in the Company. This

presentation does not constitute a

recommendation to invest in the

Company.

Certain information contained in this

presentation concerning economic

trends and performance are based on or

derived from information provided by

independent third-party sources. KAPCO

cannot guarantee the accuracy of such

information and has not independently

verified the assumptions on which such

information is based. KAPCO disclaims

any responsibility for any errors or

omissions in such information, including

the financial calculations, projection,

and forecasts in this presentation.

overview of kot addu power company ltd · iso 9001:2015 (quality management system) iso 14001:2015...

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