Pakgen Power Limited (PKGP) reported a net profit of PKR 4.47 billion (EPS: PKR 12.01) in CY24, down 24% YoY from PKR 5.86 billion (EPS: PKR 15.76) in CY23. The decline primarily reflects lower dispatches due to limited plant operations and higher finance costs. Gross profit stood at PKR 5.35 billion, down 6% YoY. Finance cost rose by 29% YoY to PKR 40.38 million. Management disclosed that the Power Purchase Agreements (CPP, EPP, PTI), originally set to expire on October 7, 2028, have been terminated effective January 31, 2025.
All dues have been settled by April 30, 2025, with no delayed payment interest. CPPA-G will also reimburse any FBR-related tax liabilities, and accrued WPPF/WWF will be paid. The company retains ownership of the power complex and will receive no further compensation from the government or CPPA.
Trade receivables amounting to PKR 11.5 billion have been fully realized and converted into cash. The short-term investment portfolio also increased to PKR 6.6 billion. In CY24, the plant operated only during January and July, leading to lower dispatches compared to CY23 when the plant was operational for seven months. The voluntary severance scheme is underway but not yet fully implemented. Regarding the circular debt resolution, management confirmed that Pakgen has received payment under the agreed term sheet, with expectations that other IPPs will also benefit from similar settlements.
The estimated cost of a new RFP-based plant in the region is between USD 800,000 to 1 million per MW, depending on technology and capacity. Looking ahead, PKGP aims to continue power generation subject to regulatory approvals and plans to participate in the upcoming CTBCM regime. Cost-efficiency efforts include workforce reduction through a VSS and reduced maintenance costs. Surplus liquidity of PKR 6.73 billion and recent receivables realization will support operations. The company is also exploring new business opportunities and believes the plant remains viable given the domestic oversupply of RFO and its export at discounted prices (approximately 40% lower).
Important Disclosures
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