Lahore: Kohinoor Energy Limited has announced amendments to its Power Purchase Agreement (PPA) with the Central Power Purchase Agency (Guarantee) Limited, effective from November 1, 2024. The company, which operates a 124 MW furnace oil-fired power plant, disclosed the amendments in its directors' review for the third quarter ending March 31, 2025.
Key amendments include a revised indexation mechanism for variable operations and maintenance costs, which will now be indexed against a 70% devaluation of the Pakistani Rupee. The indexation to the US Consumer Price Index remains unchanged. Additionally, in the event of a PKR appreciation against the USD, the full benefit will be passed on to consumers.
The amendments introduce a hybrid take-and-pay mechanism, where 35% of the frozen escalable component will be paid on a take-or-pay basis, and 65% on a take-and-pay basis. The indexable part of the escalable component has been reduced by 30% and will be indexed at the lower of 5% or the National Consumer Price Index annually. Furthermore, delayed payment interest has been waived effective October 31, 2024.
The PPA term will be extended by 161 days without capacity payment as part of a settlement of disputed Liquidated Damages, although the Energy Purchase Price will be paid for electricity delivered when required. The dispute resolution process has also been modified, with the LCIA arbitration clause being replaced by arbitration seated in Islamabad under local laws.
Despite these changes, Kohinoor Energy Limited reported a significant drop in both operational and financial performance. During the nine-month period ending March 31, 2025, the company's plant operated at a capacity factor of 5.31%, delivering 43,276 MWh to WAPDA. This is a stark contrast to the 19.95% capacity factor and 162,645 MWh delivered in the corresponding period of the previous year.
Financially, the company reported a quarterly sales revenue of Rs. 1.064 billion, down from Rs. 2.593 billion in the same quarter of the previous fiscal year. The nine-month sales revenue declined to Rs. 2.953 billion, compared to Rs. 7.743 billion in the previous year. Net profit after tax for the third quarter was Rs. 180 million, a decrease from Rs. 442 million in the same period last year. The nine-month net profit after tax was Rs. 505 million, down from Rs. 1.199 billion in the prior year. Earnings per share fell to Rs. 2.98 from Rs. 7.08.
According to information available from the Pakistan Stock Exchange (PSX), Kohinoor Energy Limited's performance aligns with broader market trends, impacting the company's financial metrics.
Despite the decline in figures, the company's maintenance and plant condition remain robust. No engines required overhauls under the 8,000-hour maintenance program during the current period, compared to three major overhauls in the previous year. The company reported that all DG sets and auxiliary equipment are in excellent condition, ensuring safe, efficient, and reliable operations.
The Board of Directors conveyed their appreciation to the CPPA, financial institutions, Pakistan State Oil Company, Wartsila, stakeholders, suppliers, and shareholders for their continued support and trust. The board also acknowledged the dedication of the management and employees who have ensured the company's smooth operations.