Lalpir Power Limited (LPL) posted a net profit of PKR 464.79 million (EPS: PKR 1.22) in CY24, a sharp decline from PKR 4.58 billion (EPS: PKR 12.05) in CY23. The earnings contraction is primarily attributable to a one-time write-off of delayed receivables and reduced plant operations.
Gross margin compressed to 25% (CY23: 28%), while net margin dropped significantly to 3% (CY23: 24%) due to receivable adjustments. Operational constraints also weighed on performance, with the plant running only during January and June 2024, resulting in a considerable decline in energy export dispatches.
The Power Purchase Agreement (PPA), initially set to expire on November 28, 2028, has been terminated effective October 1, 2024. As part of the settlement, all outstanding dues—including CPP, EPP, and PTI—up to September 30, 2024, will be cleared by December 31, 2024. The delayed payment interest has been waived, while accrued WWF/WPPF will be paid. CPPA-G will bear any FBR-assessed tax liabilities if ruled in its favor.
The company retains ownership of the plant but will receive no additional compensation from CPPA or the government. As of December 31, 2024, no trade receivables remain outstanding, and short-term investments stood at PKR 9.09 billion. Post-termination, electricity costs have fluctuated around PKR 36–38/unit—broadly in line with pre-termination pricing. Going forward, LPL plans to resume power generation, subject to regulatory and legal approvals. The company intends to participate in the upcoming CTBCM framework via the wheeling model. Cost optimization efforts include a Voluntary Severance Scheme and reduced maintenance expenditure. With surplus liquidity of PKR 9.77 billion, the company expects to generate sufficient income to sustain operations and is evaluating new investment opportunities in the agriculture sector.
Important Disclosures
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