Lahore: Kohinoor Energy Limited (KOHE) conducted a corporate briefing session today to discuss its financial results for the fiscal year 2024 and outline future strategies. The session highlighted a modest increase in profit, a decline in revenue, and significant changes in its operational and financial strategies.

According to a statement by AKD Securities Limited, KOHE reported a profit after tax of PkR1.60 billion (EPS: PkR9.44) for FY24, a slight improvement from PkR1.57 billion (EPS: PkR9.29) in FY23. This increase was attributed to a 75% rise in other income and a 35% reduction in finance costs, alongside the effects of rupee devaluation.

The company's revenue, however, fell by 20% year-over-year to PkR10 billion, attributed to lower energy purchase price revenue. The operational capacity of the power complex, equipped with eight WARTSILA diesel generators and other infrastructure, saw a decrease in utilization from 30.3% to 19.0%, with electricity generation dropping from 329,160 MWh to 207,615 MWh.

The Saigol group maintains a majority ownership of 62% in KOHE, which paid a dividend of PkR14.5 per share in FY24, in light of the plant's power purchase agreement (PPA) expiring in June 2027.

Challenges identified include circular debt, reduced dispatch rates, increasing solarization, and the upcoming PPA expiration. The cabinet has approved amendments to the PPA, transitioning to a 'Hybrid Take-and-Pay' tariff model, affecting revenue streams and potentially reducing annual cash generation to PkR1 billion.

KOHE is also exploring a potential agreement with Sundar Industrial Estate for a load requirement of 40-90MW. The company acknowledges that the new tariff model could significantly impact earnings and dividends, stressing the importance of strategic diversification and cost efficiency.