Pakistan Energy: CY18 shows RLNG + Coal is the new FO
With Dec'18 generation of 7.7TwH (+2%MoM/0%YoY) wraps up a strong 4QCY18 (cumulative generation of 24.8TwH, up 44%YoY) and hefty CY18, where total generated units hit 124TwH mark rising 17%YoY pushed by capacity additions from RLNG/Coal (16.9/11.9TwH in additional generation) capped by FO falling of favor (49%YoY fall in units generated)
~2,034MW of dependable capacity was added to the grid (total dependable capacity of ~14,197MW vs. ~12,163MW in CY17), taking annual system-wide load factors (on nameplate capacity of 30,590MW after additions of 1,146MW)) to 46.4% vs. 41.3% in CY17, a number that is likely to shoot up as recently commissioned plants start running at higher load factors, likely by 2QCY19 (as temperatures start rising)
Cost of generation grew with fuel costs (average cost of generation jumped 14%YoY to PkR5.93/KwH, in spite of the shift away from FO unraveling over the last three years (FO's share at 6.8% in 2QFY19 vs. 38.1% in 3QFY16) continued reliance on thermal fuel (60.3% for 2QFY19 vs. 67.7% in 3QFY16) nullified the impact of renewables (zero fuel costs)
While the need for upgrading T&D remains pertinent, lower oil prices and the confluence of major capacity additions call for decisive action to control circular debt, where HUBC looks poised to benefit from additional income through new ventures and clearance of liquidity woes.
AKD Research
Hub Power Company is a holding company. Through its subsidiaries, Co. is engaged as a power producer in Pakistan that focuses on developing, owning, operating and maintaining power stations. Co. supplies electricity to Water and Power Development Authority and National Transmission and Despatch Company under long term Power Purchase Agreements for its Hub and Narowal plants respectively.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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