Lahore, March 24, 2022 (PPI-OT):Halmore Power Generation Company Limited (Halmore Power) runs a 225MW Combined cycle power plant. The plant achieved its commercial operations in June 2011 with its PPA valid for 30 years starting from the COD. It enjoys sovereign guarantee against receivables from power purchaser – CPPA-G – given adherence to agreed performance benchmarks. The ratings incorporate low operational risk, a result of established performance credentials of GE – the O and M operator.

The required availability for Halmore Power under the PPA is 88%. During the period average plant availability remained in accordance with the agreed parameter. The plant generated 333,913,432 KWh of net electrical output for the six-month ended Dec 2021. Net income recorded during 6MFY22 was PKR 1,096mln (6MFY21: PKR 1,639mln). As a result of the revision in agreement with CPPA-G, the Company’s profitability indicators will be slightly lower going forward, albeit are considered to be adequate. However, in line with the agreement, the issue of long outstanding receivables has been assuaged, as the Company has received 40% of its receivables accumulated till November 2020 from the off taker in January 2022, with an agreement of full settlement within 6 months.

The company successfully paid off its Long-Term project related debt in June 2021 resulting in a favourable impact on its financial risk profile. As on Dec 2021, the debt profile comprises short-term borrowings only, which have been availed to meet working capital requirements, mainly on account of accumulation of receivables from the off taker. However, with the receipt of outstanding receivables from the CPPA-G, under the master agreement the working capital cycle will improve and hence the utilization of short-term borrowing will decreases going forward.

Upholding operational performance in line with agreed performance levels would remain a key rating driver. Sustained good financial discipline and upholding strong operational performance in line with agreed performance levels remain important.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com