thermal zoiya final slides

8/12/2019 THERMAL Zoiya Final Slides

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Pak Thermal Power

Anum KhanKiran Idrees

Maha FarooqMuhammad Zain Ul AbideenZoiya Hafeez


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Introduction Business name: Pak Thermal Power Plant

Total project cost: Rs. 5,391,932,391(approximately)

Proposed business venture for the thermal power

plant capacity : 60 MW

Project Location: Wazirabad, district Gurjranwala,Punjab, Pakistan


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Reasons For land

Infrastructure LaborAvailability

Water Supply IndustrialHub


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Energy Crisis The total power generation capacity of Pakistan is about 23,538MW.

Energy consumption increase by about 80 percent in the last 15 years. countrys electricity demand will increase to around 40,000MW by

2020.(WAPDA)

The demand for energy has been increasing at a rate of 4.8% duringthe last five years

The following is a breakup of the total power production in Pakistan: fossil fuel 13,637 MW 65% of total hydro 6,654 MW 31% of total nuclear 812 MW 4% of total


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Producers

There are four major power producers incountry:

WAPDA KESC

IPPs PAEC


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Cost of engines


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Dollars Rate Rs Quantity

Total Cost

CaterpillarEngines10MW power

6,500,000 108 7,020,000,000 6 4,212,000,000

Importduty(approx.6%)

390,000 108 42,120,000 6 252,720,000

Insurance(app

rox. 0.3 %

108 2,106,000 6 12, 636,000

Total cost Rs.4,477,356,000


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Total cost of project


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Caterpillar Engine 10MW Power 4,212,000,000

Import duty (Approximately 6%)252,720,000

Insurance (Approximately 0.3%)12, 636,000

Building Cost (30% of Land Cost)24,000,000.00

Land Cost (40 acrs)80,000,000.00

Spares and tools7,200,282.00

Chemicals inventory2,052,081

Fuel inventory291,251,407

Cash in Hand9,964,266.00

Company vehicles33,500,000.00

Storage containers5,000,000.00

Furniture800,000.00

Installations350,000,000

Gas connection80,000,000.00

Electricity connection10,000,000.00

Telephone License1,000,000.00

Environmental License 10,000,000.00IPP License 9,808,354.00

Total Plant Cost Rs. 5,391,932,391


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Capital Structure


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Debt Equity Total

% 60 40 100%

amount 3,235,159,434 2,156,772,956 Rs.5,391,932,391


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Profit & Loss StatementYear 1 (Rs.) Year 2 (Rs.) Year 3 (Rs.) Year 4 (Rs.) Year 5 (Rs.)

Sales 6,912,270,720 7,188,761,549 7,476,312,011 7,775,364,491 8,086,379,071

COGS 5,003,131,677 5,196,119,872 5,396,827,595 5,605,563,627 5,822,649,100Gross Profit 1,909,139,043 1,992,641,677 2,079,484,416 2,169,800,864 2,263,729,970

Operating Expenses

Salaries 5,977,080 6,216,163 6,464,810 6,723,402 6,992,338

Transportation 1,000,000 1,040,000 1,081,600 1,124,864 1,169,859

Vehicles depreciation 1,256,250 1,256,250 1,256,250 1,256,250 1,256,250

building depreciation 900,000 900,000 900,000 900,000 900,000

furniture depreciation 30,000 30,000 30,000 30,000 30,000

Amort. of import duty & insurance 13,649,448 13,649,448 13,649,448 13,649,448 13,649,448

Amort. of Utilities connections 4,550,000 4,550,000 4,550,000 4,550,000 4,550,000

Amort. of Environmental License 500,000 500,000 500,000 500,000 500,000

Amort. of IPP license 490,418 490,418 490,418 490,418 490,418

Commission (1.5% of Sales) 103,684,061 107,831,423 112,144,680 116,630,467 121,295,686

Admin Expenses (0.5% of Sales) 34,561,354 35,943,808 37,381,560 38,876,822 40,431,895

Miscellaneous Expenses (5 % of CGS) 279,731,406 290,920,662 302,557,489 314,659,788 327,246,180

EBIT 1,462,809,027 1,529,313,504 1,598,478,161 1,670,409,404 1,745,217,896

Interest Payment 404,394,929 341,368,322 270,463,388 190,695,338 100,956,281

EBT 1,058,414,097 1,187,945,182 1,328,014,773 1,479,714,066 1,644,261,615

Tax Rate 30% 317,524,229 356,383,555 398,404,432 443,914,220 493,278,484Net Profit 740,889,868 831,561,628 929,610,341 1,035,799,846 1,150,983,130


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Cost of Goods Sold (Year 1)Rs.

Direct Material:Fuel cost 4,688,247,653Lubrication costs 21,600,846Chemicals costs 8,208,321

Depreciation of engines 165,114,296

Depreciation of storage containers 187,500 4,896,483,616

Direct Labour:mechanics 414,000

shift engineers 648,000

chief electrical engineer 420,000

plant workers 432,000

supervisor 960,000

lift driver 90,000 2,964,000

Factory Overheads (1.5% of sales) 103,684,060

Total COGS 5,003,131,676


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Depreciation ScheduleScrap Value

(25% of value) Years Depreciation

Engines 0.25 20 157,950,000

Installations 0.25 20 13,125,000

Storage Containers 0.25 20 187,500

Building 0.25 20 900,000

Company Vehicles 0.25 20 1,256,250

Furniture 0.25 20 30,000


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Amortization Schedule

AssetCost of Asset

(Rs.)Number of

YearsAmmortization (Rs.

Import Duty 252,720,000 20 12,636,000

Insurance12,636,000

5 2,527,200Gas Connection 80,000,000 20 4,000,000

Electricity Connection 10,000,000 20 500,000

Telephone Connection 1,000,000 20 50,000

Environmental License 10,000,000 20 500,000

IPP License 9,808,354 20 490,418


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Loan Amortization Schedule

Year Payment (Rs.) Interest payment (Rs.)Principal Decreased

(Rs.)Principal Amount

(Rs.)

1 908,607,790 404,394,929.29 504,212,860.71 2,730,946,573.59

2 908,607,790 341,368,321.70 567,239,468.30 2,163,707,105.29

3 908,607,790 270,463,388.16 638,144,401.84 1,525,562,703.45

4 908,607,790 190,695,337.93 717,912,452.07 807,650,251.38

5 908,607,790 100,956,281.42 807,651,508.58 (7.20)


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DEPRECIATION

Scrap Value (25% of value) Years Depreciation

Engines 0.25 20.00 157,950,000.00

Installations 0.25 20.00 13,125,000.00

Storage Containers 0.25 20.00 187,500.00

Building 0.25 20.00 900,000.00

Company Vehicles 0.25 20.00 1,256,250.00

Furniture 0.25 20.00 30,000.00


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Balance Sheet

year 1 year 2 year 3 year 4 year 5

current assets

cash 410,847,112.99 1,062,785,320.98 1,529,443,691.80 2,022,379,148.17 2,540,608,688.22

fuel inv 291,251,407.50 302,901,463.80 315,017,522.35 327,618,223.25 340,722,952.18

lubrication fuel inv 1,800,071.00 1,872,073.84 1,946,956.79 2,024,835.07 2,105,828.47

spares and tools inv 7,200,282.00 7,488,293.28 7,787,825.01 8,099,338.01 8,423,311.53

chemcials inv 2,052,081.00 2,134,164.24 2,219,530.81 2,308,312.04 2,400,644.52accounts rec (10% of

sales) 691,227,072.00 718,876,154.88 747,631,201.08 777,536,449.12 808,637,907.08

993,530,913.50 1,033,272,150.04 1,074,603,036.04 1,117,587,157.48 1,162,290,643.78

total current assets 1,404,378,026.49 2,096,057,471.02 2,604,046,727.84 3,139,966,305.65 3,702,899,332.00


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fixed assets

caterpillar engines and turbines 4,237,933,600.00 4,079,983,600.00 3,922,033,600.00 3,764,083,600.00 3,606,133,600.00

land 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00

building 51,208,364.00 50,308,364.00 49,408,364.00 48,508,364.00 47,608,364.00

furniture 770,000.00 740,000.00 710,000.00 680,000.00 650,000.00

company vehicles 20,693,750.00 19,437,500.00 18,181,250.00 16,925,000.00 15,668,750.00

installations 423,793,360.00 410,668,360.00 397,543,360.00 384,418,360.00 371,293,360.00

storage containers 4,812,500.00 5,005,000.00 5,205,200.00 5,413,408.00 5,629,944.32

environmental license 9,500,000.00 9,000,000.00 8,500,000.00 8,000,000.00 7,500,000.00

ipp license 9,317,936.30 8,827,518.60 8,337,100.90 7,846,683.20 7,356,265.50

utilities connections 85,500,000.00 80,950,000.00 76,400,000.00 71,850,000.00 67,300,000.00

insurance 10,108,800.00 7,581,600.00 5,054,400.00 2,527,200.00 -

import duty 202,176,000.00 189,540,000.00 176,904,000.00 164,268,000.00 151,632,000.00

total fixed assets 5,135,814,310.30 4,744,920,342.60 4,566,318,874.90 4,387,725,415.20 4,209,140,283.82

6,129,345,223.80 5,778,192,492.64 5,640,921,910.94 5,505,312,572.68 5,371,430,927.60

TOTAL AssetsPKR

6,540,192,336.79PKR

6,840,977,813.62PKR

7,170,365,602.74PKR

7,527,691,720.85PKR

7,912,039,615.82


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CURRENT LIABILITIES

accrued exp (10% of gp) 190,913,904.31 198,550,460.48 206,492,478.90 214,752,178.06 223,342,265.18

accounts payable (15% of fuel cost) 720,669,030.77 749,495,792.00 779,475,623.68 810,654,648.63 843,080,834.57

total current liabilities 911,582,935.08 948,046,252.48 985,968,102.58 1,025,406,826.68 1,066,423,099.75

long term liabilities

long term debt 2,730,946,573.59 2,163,707,105.29 1,525,562,703.45 807,650,251.38 (1,257.20)

total l.t liabilities 2,730,946,573.59 2,163,707,105.29 1,525,562,703.45 807,650,251.38 (1,257.20)

total liabilities 3,642,529,508.67 3,111,753,357.77 2,511,530,806.03 1,833,057,078.06 1,066,421,842.55

shared capital ( 215677296shs. @par rs.10) 2,156,772,960.00 2,156,772,960.00 2,156,772,960.00 2,156,772,960.00 2,156,772,960.00

retained earnings 740,889,868.13 1,572,451,495.85 2,502,061,836.72 3,537,861,682.79 4,688,844,813.27

totalPKR

6,540,192,336.79PKR

6,840,977,813.62PKR

7,170,365,602.74PKR

7,527,691,720.85PKR

7,912,039,615.82


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Liquidity

Year 1 Year 2 Year 3 Year 4 Year 5

Current 1.54 2.21 2.64 3.06 3.47

Quick 1.21 1.88 2.31 2.73 3.14


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Profitability


GP margin 0.28 0.28 0.28 0.28 0.28

Net profitmargin 0.11 0.12 0.12 0.13 0.14

OperatingProfitmargin

0.21 0.21 0.21 0.21 0.22

ROA 0.11 0.12 0.13 0.14 0.15

ROE 0.26 0.22 0.20 0.18 0.17

EPS 3.44 3.86 4.31 4.80 5.34


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Assets productivity


Total Asset

turnover

1.06 1.05 1.04 1.03 1.02

Fixed AssetsTurnover

1.35 1.52 1.64 1.77 1.92


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Leverage

Year 1 Year 2 Year3 Year 4 Year 5

Debt tototal Assetsratio

0.42 0.32 0.21 0.11 0

Debt toEquity 0.94 0.58 0.33 0.14 0

Timesinterest

earned

3.62 4.48 5.91 8.76 17.29


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Return on Capital


ROIC 0.19 0.20 0.21 0.22 0.23


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WACC

% change in KSE-100prices

% change in Kohinoor Stock Prices

1 24% 34%

2 19% -13.6%

3 13% 1.1%

Average 19% 8.17%


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Beta(levered)= bul(1+(1-T)D/OE)

WACC = wc*kc + wd*kd(1-T)

D/OE of Kohinoor= 55/45%

D/OE of Pak Thermal= 60/40%

Rm 19%

Covariance 0.00621889

Variance 0.00303333

Beta (levered) 2.05018315


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Beta (unlevered) 1.105

Beta (levered) 2.27

Kc = Rf + (Rm-Rf)bLkc 31.07%

Kd 12.50%

WACC 17.68%


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Free Cash Flow Model


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Operating Cash Flows

thermal zoiya final slides

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