EPQL’s High-Stakes Power Play: Navigating Policy Shifts & Fuel Uncertainty

Engro Powergen Qadirpur Ltd (EPQL) conducted its analyst briefing, providing insights into financial performance, operational updates, and regulatory developments.

Financial Performance

• Net Sales: PKR 13.2 billion, unchanged YoY.

• Net Profit: Declined 15% YoY to PKR 2.1 billion (EPS: PKR 6.61) due to a 13x increase in other expenses (PKR 435 million).

• Receivables: Declined to PKR 9.5 billion (from PKR 10.5 billion in 4QCY23). Collection rate exceeded 100%, clearing overdue payments.

• Balloon Payment: Management expects PKR 8.2 billion in outstanding principal receivables by April-May 2025.

Operational Updates

• Generation Output: 847 GWh (load factor: 45%) vs. 870 GWh in CY23.

• Merit Order Ranking: Currently 11, expected to drop to 13 with the Badar Gas Field addition.

• Fuel Cost (Badar Gas vs. Qadirpur): PKR 13/kWh vs. PKR 9/kWh. Management does not anticipate a significant impact on load factor.

Regulatory & PPA Amendments

• Take-and-Pay Model: Effective Nov 2024, minimum billable capacity factor reduced to 35% (from 100%).

• LPS Waiver: PKR 1.7 billion in LPS receivables from CPPA-G waived. SNGPL obligations also cleared.

• NEPRA Petition Filed: PPA changes pending regulatory approval.

Future Outlook & Strategic Developments

• Badar Gas Field (PEL):

  • NEPRA approved license modification for alternative gas sourcing.

  • Expected 8-13 mmcfd gas supply at $5.6/MMBTU, ensuring a secure supply for at least three years.

  • Additional generation: 22MW-30MW.

• Exploring Additional Sources:

  • Kandhkot and other fields under evaluation.

  • Third-party sale agreements in place.

• Market Risks:

  • Declining imported coal prices.

  • WACOG implementation affecting merit order position.

Conclusion

EPQL remains focused on operational efficiency, regulatory compliance, and alternative fuel sourcing to sustain performance amid sectoral challenges. The transition to a take-and-pay model, coupled with diversification into Badar Gas Field, positions the company strategically for long-term stability.