K-electric Ltd. · PSX:KEL
K-electric — Investor Presentation (March 2020)
31 slides from K-electric's investor presentation, March 2020
Slide 1: K-Electric Limited Investor Presentation
K-Electric Limited Investor Presentation March 2020
Slide 2: Market Overview
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi-Year Tariff Future Plans Key Challenges The Journey Continues
Slide 3: Pakistan – Country Overview
Pakistan – Country Overview Country Overview Significant progress in recent months Demographics (Million) FY 19 (est.) Positive outlook as macroeconomic conditions improve and structural reforms in fiscal China management and competitiveness take effect Population 217 – Aged less than 35 years 76% I
Slide 4: Pakistan Power Sector – State of the Industry
Pakistan Power Sector – State of the Industry Over 10,000 MW of power generation has been added in the last 5 years, however, overall energy planning remained fragmented across the energy value chain, with little focus on reducing losses and upgrading Transmission and Distribution capacity AT&C Loss
Slide 5: Strategic Importance of Karachi
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi-Year Tariff Future Plans Key Challenges The Journey Continues
Slide 6: Strategic Importance of Karachi
Strategic Importance of Karachi The city of Karachi is essential to Pakistan’s economy and drives much of the country’s economic growth. As the city’s sole electricity provider, KE is of strategic importance to the municipality and the country Karachi’s Importance to Pakistan Rest of Pakistan vs. Ka
Slide 7: Reforms Underway
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi-Year Tariff Future Plans Key Challenges The Journey Continues
Slide 8: Pakistan Power Sector – Reforms Underway
Pakistan Power Sector – Reforms Underway Policy reforms are underway to address key power sector issues including circular debt and other structural weaknesses – improvement of ecosystem and system performance will definitely fuel economic growth led by domestic and export-led businesses Challenges
Slide 9: KE's Brief History & Overview
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi Year Tariff Future Plans Key Challenges The Journey Continues
Slide 10: Business Overview
Business Overview As the only vertically integrated power supply company in Pakistan, KE has a robust network to ensure sustainable and reliable power supply to Karachi and its adjoining areas Presence Across the Entire Power Value Chain Generation Transmission Distribution Own Generation Grid Stati
Slide 11: Brief History & Overview
Brief History & Overview Incorporated in 1913, KE is the only power utility company having presence across the entire energy value chain, and has a customer base of more than 2.8 Million From KESC to KE1 KESC Nationalization Turnaround Continued Focus on Incorporated of KESC Commences Sustainability
Slide 12: KE's Turnaround – A Success Story
KE’s Turnaround – A Success Story Privatized in 2005, KE’s turnaround success presents a classic example of targeted and well-timed investments transforming a cash-bleed, loss making entity into a profit-making utility driven by significant investments and operational improvements KE’s Turnaround fr
Slide 13: Operational & Financial Performance
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi Year Tariff Future Plans Key Challenges The Journey Continues
Slide 14: Operational Performance since 2009
Operational Performance since 2009 Through investments of over USD 2.4 Billion across the value chain during FY 09 to FY 191, KE’s management focused on enhancing fleet efficiency, reducing T&D losses and improving operational processes to unlock value Investments across the value chain since 2009 G
Slide 15: Investments made across the Value Chain since 2016
Investments made across the Value Chain since 2016 Over the last three years, various initiatives were undertaken across the energy value chain to enhance capacity, improve reliability of the network along with targeted loss reduction Capex FY 17 – FY 191 (USD Million) Capacity Addition & System Imp
Slide 16: Operational Performance – Generation, Transmission & Distribution
Operational Performance – Generation, Transmission & Distribution Driven by focused investments, the company has continued to improve on the operational parameters – strong operational performance in the first quarter of FY 20 to further the operational improvements of previous years Sent-out (GWh)
Slide 17: Financial Performance
Financial Performance Despite change in tariff, the company continued to perform on the operational front which translated into improved financial performance in FY 18 Financial Highlights Change in Tariff Level & Structure Revenue EBITDA Profit Before Taxation • As compared to FY 16, FY 17 profitab
Slide 18: Key Financing Initiatives
Key Financing Initiatives Investors have shown continued trust and confidence in the company’s fundamentals, enabling KE to make the planned investments on accelerated basis and further the positive trajectory of operational improvements Key Financing Initiatives USD 50 Million GuarantCo supported l
Slide 19: KE Sukuk – PKR 25 Billion
KE Sukuk – PKR 25 Billion KE is issuing a rated, secured and listed Sukuk of up to PKR 25 Billion (inclusive of Green Shoe Option of PKR 5 Billion) for which c. PKR 23.7 Billion has already been received from pre-IPO investors whereas, balance of c. PKR 1.3 Billion is targeted through IPO PKR 25 Bil
Slide 20: Multi-Year Tariff
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi Year Tariff Future Plans Key Challenges The Journey Continues
Slide 21: Determined MYT
Determined MYT As compared to KE’s Previous MYT, the Determined MYT presents a different, de-risked, Return on RAB structure with additional upsides for KE to unlock value and further its improvement trajectory Opportunities to Unlock Value under the Determined MYT As highlighted below, the Determin
Slide 22: Future Plans
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi Year Tariff Future Plans Key Challenges The Journey Continues
Slide 23: Initiatives across the Energy Value Chain
Initiatives across the Energy Value Chain Planned initiatives would result in investments of c. USD 3 Billion in all core functions in the next four years – would enable KE to unlock key value drivers under the MYT along with benefitting consumers and the economy at large Investments across the Valu
Slide 24: Potential for Further Value Improvement through a Strategic Investor
Potential for Further Value Improvement through a Strategic Investor In addition to KE’s robust investment plan of c. USD 3 Billion across the energy value chain, an aggressive, strategic investor, Capex plan would further improve Karachi’s power infrastructure Strategic Investment – Potential Impac
Slide 25: Key Challenges
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi Year Tariff Future Plans Key Challenges The Journey Continues
Slide 26: Key Challenges – Receivables from Government Entities and Departments
Key Challenges – Receivables from Government Entities and Departments Delays in release of payments from relevant authorities and growing receivables from government entities impacts the working capital position of the company for which continuous engagement with relevant stakeholders is being done
Slide 27: Other Challenges
Other Challenges The management is confident of the strategies put in place to mitigate other key challenges as highlighted below Challenges Description Mitigating Strategy • Planned 900 MW and 700 MW projects being pursued on Demand-Supply • Delayed finalization of MYT has resulted in consequential
Slide 28: The Journey Continues
Market Overview Pakistan – Country Overview & Power Sector Strategic Importance of Karachi Reforms Underway KE’s Brief History & Overview Operational & Financial Performance Multi Year Tariff Future Plans Key Challenges The Journey Continues
Slide 29: The Journey Continues
The Journey Continues Capitalizing on the ongoing projects and with the continued investments, KE would continue to strive, improving the lives of people of Karachi and bringing economic prosperity in the country Potential Impact Capacity • Swift capacity additions and ability Growth & • Operational
Slide 30: Thank You
Thank You
Slide 31: Disclaimer
Disclaimer The information contained in this performance is not indicative of future as, or relied upon in respect of, any offer for presentation is given without any liability results. Nothing contained herein should be sale or subscription of, or solicitation of any whatsoever by K-Electric Ltd or