Corporate results: KESC posts Rs1.7 billion profit

KESC’s profit before tax actually jumped to Rs1.5 billion from Rs234 million last year as the country’s only privatised power utility cut fuel oil expenses and gas purchases. PHOTO: FILE

KARACHI: The Karachi Electric Supply Company (KESC) on Tuesday announced a net profit of Rs1.7 billion for July-September quarter, down 24% from last year’s comparable period, mainly because of a lesser deferred tax benefit.

KESC’s profit before tax actually jumped to Rs1.5 billion from Rs234 million last year as the country’s only privatised power utility cut fuel oil expenses and gas purchases.

Net profit appears less than last year’s because of Rs2 billion deferred tax benefit the company got in the same period of 2012.

“Companies can do that until they are in a comfortable position to pay taxes,” said Shahid Ali, Head of Research at Summit Capital.

Though KESC’s revenues, which come from electricity bills charged from consumers, remained almost stagnant at Rs49 billion, the company reduced fuel consumption by 11.6% to Rs19.8 billion. This did not include cost of electricity purchases from Wapda.

Finance cost also saw a decline to Rs2.86 billion from Rs3.4 billion. Other operating income, which includes collection of late payment penalty from consumers, was down 37% to Rs999 million.

KESC, which serves 2.5 million customers, has markedly improved power distribution in Karachi by employing good-customer-gets-good-service policy. Transmission and distribution losses of the company have come down to 27.8% from 36% in 2009.