PACRA Maintains Entity Ratings of Nishat Power Limited

Lahore, March 28, 2019 (PPI-OT): Nishat Power Limited (Nishat Power) runs a 200MW power plant. The company operates in the regulated power sector. It enjoys sovereign guarantee against receivables from power purchaser – NTDC – given adherence to agreed performance benchmarks. Nishat Power Limited, with in-house Operations and Maintenance (O and M), has a well-experienced team. While cost-savings are a likely outcome, it is critical to hold any operational benchmarks to avoid any consequences. The company’s financial risk profile is largely dependent on repayment behaviour of power purchaser.

Topline of the company has increased, majorly owing to upward trend in crude oil prices, despite lower power generation during the period demanded by power purchaser amid to better energy mix. In recent period, receivables including delayed payments interest witnessed an increase. Nevertheless, the company has been managing its working capital requirements via short-term borrowings. Nishat Power has been paying dividend which in times of need is an internal source of liquidity available. Plant has performed up to the mark with greater availability factor than of its set benchmark. Thus healthy profile of the company should help ameliorate its financial behaviour.

Upholding operational performance in line with agreed performance levels would remain a key rating driver. Meanwhile, any significant increase in overdue receivables, as a result of rising circular debt, may negatively impact the ratings.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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