KE’s mounting losses are merely a ‘blip’

K-Electric Ltd CEO Moonis Alvi said on Tuesday the unusually high loss that the vertically integrated power utility recorded in the first nine months of 2022-23 constitutes no more than a “blip” in the long run. Speaking to economist Ali Khizar on his YouTube channel, Mr Alvi said the company’s lenders, including those from Europe and China, knew in advance about the loss. “The substantial part of this loss was budgeted… We’d told our lenders in advance to expect a loss,” he said. The financial performance of K-Electric took a nosedive in the first three quarters of 2022-23, with a net loss of Rs39.4bn versus a net profit of Rs1.5bn a year ago. The quarterly loss in January-March clocked in at Rs12.3bn, up 6.7 times from the same quarter of the preceding year. Rumours did the rounds on social media after the latest quarterly result that the loss, unprecedented in recent years, had something to do with the change in the company’s ownership structure last year. Mr Alvi denied it. K-Electric came out in February with a seven-year plan involving Rs484bn in fresh investments — a recent commitment that Mr Alvi repeatedly cited to support his claim that the mounting losses were not only expected but also accounted for. “The board that approved that investment plan was the same board that approved this loss. It means the loss was predictable. Our position is that these losses have been caused by factors that are not in our control,” he said. He listed four factors along with the respective rupee figures that contributed to the company’s negative bottom line.