Saif Power Limited (SPWL) - April 2023

Saif Power Limited (SPWL) – April 2023

Research Team

Table of Contents

Corporate Briefing Notes

Saif Power Limited (SPWL) conducted its corporate briefing session today to discuss the financial results for CY22 and to highlight its future outlook.

Key Highlights

● To recall, SPWL reported a revenue of PKR22.9bn in CY22 compared to PKR16bn in SPLY. The increase in sales was attributed to the relatively higher demand.
● Net profit of the company remained flat at PKR1.9bn (EPS: PKR5.05/sh) in CY22 against PKR1.9bn in SPLY.
● The management informed that the company’s receivables still remained a challenge as total amount stood at PKR11.6bn as of CY22. However, Company ensured that there is enough amount of working capital to carry on the operations.
● Capacity utilization of the plant dropped from 41.09% in CY21 to 34.53% in CY22.
● The dividend payout has continuously increased for last two years, growing from 37% in CY20 to 80% and 85% in CY21 and CY22 respectively.
● Talking about the sale of land and other assets of the company, the management shared that the agreements have been signed and the execution is under process with the buyer.
● As per management, two agreements of “Master Agreement” and “PPA Amendment Agreements” were revised last year. According to these amendments, the receivable of PKR9bn would be received in two tranches, and fuel and O&M savings will be shared in a ratio of 60:40 between power purchaser and the company.
● Furthermore, Return on Equity During Construction (RoEDC) has divided between local and foreign investors with the proportion of 17% and 12%, respectively.
● The management also confirmed that the long-standing dispute of PKR477mn with CPPA-G has been resolved.
● Regarding the delayed payment rate, the company disclosed that it has been categorized into two ways. For the first 60 days, this rate will be KIBOR + 2% and the KIBOR + 4.5% then afterward. To note, the treatment is exclusive of RLNG invoices.

Future Outlook

● Going-forward, the management highlighted that SPWL will continue paying higher dividend if there’s any additional cash available in the future. However, company also feared that if current economic challenges persist, the recovery of invoices could be a major problem for the company.

Important Disclosures


This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.

Analyst certification:

The research analyst for this report certifies that 1.all of the views expressed in this report accurately reflect her personal views about the subject and 2.no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this report.

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