Lahore, The Pakistan Credit Rating Agency Limited (PACRA) has maintained its ratings for Kohinoor Energy Limited, affirming both its long-term and short-term entity ratings at AA and A1+ respectively, with a stable outlook. This decision reflects the consistent performance and strong business profile of Kohinoor Energy, even as the company navigates shifts in the energy sector towards more cost-effective sources of power generation.
According to The Pakistan Credit Rating Agency Limited, Kohinoor Energy's ratings are underpinned by its advantageous Power Purchase Agreement that ensures demand risk coverage, supplemented by a sovereign guarantee under the Implementation Agreement contingent upon the company meeting specific performance benchmarks. Despite a reduction in electricity generation, attributed to the power purchaser's shift towards cheaper energy sources such as hydro, local coal, solar, wind, and biogas, Kohinoor Energy has successfully maintained its operational and efficiency benchmarks. This achievement is largely due to the expertise of its operation and maintenance (O and M) team and the robustness of its systems and controls.
During the first half of the fiscal year 2024, Kohinoor Energy's capacity factor stood at 19.11%, down from 30.69% in the same period the previous year, resulting in a production of 104,642 MWh of electricity compared to 168,042 MWh in the prior year. Despite this decrease in output, the company saw a benefit in margins due to lower load factors and the appreciation of the USD against the PKR. Financially, the company reported a top-line of PKR 5,150 million in the same period, against a backdrop of a fully paid long-term debt since June 2008, showcasing a leverage standing at 40% due to short-term borrowings only.
Kohinoor Energy's affiliation with the Saigol Group continues to bolster its ratings, with the operational risks associated with its in-house O and M activities being well-managed. The future of the company's ratings will depend on maintaining strong operational performance and sustained profitability. Kohinoor Energy, established as an independent power producer under the Power Policy 1994, began commercial operations in June 1997. It is notable for its dependable capacity of 124MW out of a total 131MW and is listed on the Pakistan Stock Exchange, with the Saigol family holding a majority stake.