KOHE

⚡ Flash Summary

Kohinoor Energy Limited (KEL) reported its Corporate Briefing Presentation for the financial year ended June 30, 2025. The company’s principal activities involve owning, operating, and maintaining a furnace oil power station with a net capacity of 124 MW. KEL has an exclusive 30-year Power Purchase Agreement (PPA) and Fuel Supply Agreement (FSA). KEL demonstrated 129.29 MW capacity, exceeding its contractual obligation of 124 MW and is a debt-free company, having repaid all long-term debts.

📌 Key Takeaways

• 1. ⚡️ KEL was established by Saigols Group and Toyota Tsusho Corporation.
• 2. ⚙️ Operates a furnace oil power station with a 124 MW net capacity.
• 3. 📜 KEL has a 30-year Power Purchase Agreement (PPA) extended by 161 days, ending November 27, 2027.
• 4. ⛽ Also has a 30-year Fuel Supply Agreement (FSA).
• 5. 🤝 Implementation Agreement (IA) guarantees performance by power purchaser and fuel supplier.
• 6. 🏢 Saigols hold a majority of 62% shareholding in KEL.
• 7. 💪 Company demonstrated 129.29 MW capacity in its annual test, surpassing the 124 MW obligation.
• 8. 💰 KEL is a debt-free company.
• 9. 📉 Current Assets decreased from Rs. 5,346 million in 2024 to Rs. 2,850 million in 2025.
• 10. 📉 Current Liabilities decreased from Rs. 3,205 million in 2024 to Rs. 1,321 million in 2025.
• 11. 📉 Yearly dispatches significantly decreased to 7.01% in 2025.
• 12. 📉 Total Turnover decreased from Rs. 10,010 million in 2024 to Rs. 4,329 million in 2025.
• 13. 📉 Net Profit decreased from Rs. 1,600 million in 2024 to Rs. 724 million in 2025.
• 14. 📉 EPS decreased from Rs. 9.44 in 2024 to Rs. 4.27 in 2025.
• 15. 📉 Dividend declared decreased from Rs. 14.50 in 2024 to Rs. 7.00 in 2025.

🎯 Investment Thesis

Given the declining financial performance and identified risks, a SELL recommendation is warranted. The sharp drop in revenue, profit, EPS, and dividends indicates significant operational challenges and potential long-term issues. Furthermore, the expiry of the PPA and increasing solarization pose substantial threats to future revenue. Price target: Rs. 20, Time horizon: 12 months. Rationale: The price target factors in the declining revenue, profitability, and heightened risk profile of the company.

⚡ Flash Summary

Kohinoor Energy Limited’s financial results for the quarter ended September 30, 2025, reveal a significant decline in sales and profitability compared to the same period last year. Sales decreased from PKR 1,462.57 million to PKR 798.47 million, leading to a substantial reduction in profit after tax, which fell from PKR 313.73 million to PKR 139.51 million. The company reported no cash dividend, bonus shares, or right shares for the quarter. The decrease in profitability is also reflected in the earnings per share, which dropped from PKR 1.85 to PKR 0.82.

📌 Key Takeaways

• 📉 Sales plummeted to PKR 798.47 million from PKR 1,462.57 million YoY.
• ⚠️ Cost of sales decreased to PKR 575.70 million from PKR 961.95 million YoY.
• 😔 Gross profit decreased to PKR 222.77 million from PKR 500.62 million YoY.
• 🏢 Administrative expenses decreased to PKR 70.50 million from PKR 88.13 million YoY.
• 😟 Operating profit decreased significantly to PKR 152.27 million from PKR 412.49 million YoY.
• 💰 Finance costs decreased substantially to PKR 15.19 million from PKR 110.73 million YoY.
• 📉 Profit before levy and taxation decreased to PKR 140.50 million from PKR 317.94 million YoY.
• 💸 Profit after tax decreased to PKR 139.51 million from PKR 313.73 million YoY.
• 📉 Earnings per share (EPS) decreased to PKR 0.82 from PKR 1.85 YoY.
• 🚫 No cash dividend was announced for the quarter.
• 📊 Total equity increased slightly to PKR 4,204.09 million from PKR 4,064.58 million since June 2025.
• 💸 Cash and bank balances decreased to PKR 26.05 million from PKR 76.56 million since June 2025.
• ⚠️ Short term finances decreased from PKR 1,050.50 million in June 2025 to PKR 437.21 million.
• ❌ No bonus or right shares were announced.

🎯 Investment Thesis

Given the significant decrease in sales and profitability, coupled with potential liquidity concerns, a SELL recommendation is warranted for Kohinoor Energy Limited. The company’s earnings have deteriorated significantly, making it a less attractive investment compared to its peers. A conservative price target of PKR 20 is set, based on a reduced P/E multiple reflecting the decreased EPS. This recommendation has a short-term time horizon (3-6 months), anticipating further negative news or lack of improvement in operational performance.

⚡ Flash Summary

Kohinoor Energy Limited (KOHE) reported significantly lower sales revenue of Rs. 798 million for the quarter ended September 30, 2025, compared to Rs. 1,463 million in the same period last year. This decline is attributed to reduced electricity dispatches, with the plant operating at a 4.80% capacity factor versus 8.30% last year. Net profit after tax also decreased to Rs. 140 million (EPS of Rs. 0.82) from Rs. 314 million (EPS of Rs. 1.85) in the prior year. Despite the lower financial performance, auxiliary equipment remains in good operational condition.

📌 Key Takeaways

• 📉 Sales revenue decreased significantly to Rs. 798 million from Rs. 1,463 million year-over-year.
• ⚡️ Electricity dispatches were lower due to a reduced capacity factor of 4.80% compared to 8.30% last year.
• 💡 Plant delivered 13,150 MWH of electricity to CPPA-G, down from 22,716 MWH in the same quarter last year.
• 💰 Net profit after tax fell to Rs. 140 million from Rs. 314 million year-over-year.
• 💸 Earnings Per Share (EPS) decreased to Rs. 0.82 from Rs. 1.85 in the corresponding quarter of the previous year.
• 🛠️ Auxiliary equipment remains in sound operational condition.
• 🏦 Status of sales tax demand from the Revenue Department remains unchanged.
• 🤝 Board expressed appreciation to stakeholders, including CPPA-G and PSO.
• 📜 Power Purchase Agreement (PPA) with CPPA-G has been extended to November 27, 2027.
• 🏢 Company operates a 124 MW furnace oil-fired power plant.
• 📜 Legal status is a public limited company listed on the Pakistan Stock Exchange.
• ✔️ The company’s wholly owned subsidiary is KEL Power Solutions (Pvt) Limited

🎯 Investment Thesis

Based on the substantial decline in revenue and profitability, a SELL recommendation is warranted. The reduced capacity utilization and subsequent drop in earnings raise concerns about the company’s near-term prospects. A price target will be set after additional due diligence. Time horizon: Medium-term.