Press Release

Ratings of K-Electric Limited

Karachi, April 28, 2021: VIS Credit Rating Company Ltd. has reaffirmed the instrument rating of ‘AA+’ (Double A Plus) assigned to K-Electric Limited’s (KE) Rs. 25 billion Sukuk. KE’s entity rating has also been reaffirmed at AA/A-1+ (Double A/A One Plus). Outlook on the assigned ratings is ‘Stable’. The previous Sukuk & entity rating action was announced on April 16, 2020.

The assigned rating recognize the strategic importance of KE, a vertically integrated utility Company, that has exclusive distribution rights in its service area i.e. Karachi and adjoining areas of Sindh and Balochistan. Business risk profile draws support from growing demand for electricity and continuous improvement across various operational metrics; however, Covid-19 had resulted in various challenges, with additional directives from the Government for power companies, aimed at consumer facilitation. Accordingly, in FY20, the improving trajectory of T&D losses had been affected while growth in unit sent out was lower than projected. However, later with economic activity revival in H1’FY2021, units billed posted strong growth of 5.5% vis-à-vis corresponding period last year.

Going forward, based on the planned initiatives, the Company remains resolute in recuperating the operational improvements, wherein improvement has already been noted with KE posting a net profit in H1’FY2021. Continuity in improvement in various operational performance metrics is considered important from a ratings perspective. The rating action is being announced in order to comply with regulatory requirements.

For further information on this rating announcement, please contact Mr. Arsal Ayub, CFA (Ext: 216) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk .



Faryal Ahmed Faheem
Deputy CEO


Applicable Rating Criteria: Industrial Corporate (May 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf

Rating The Issue (July 2020)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Notchingtheissue202007.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright April 28, 2021 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.