Information Document - Dhaka Stock Exchange

CREDIT RATING REPORTONKHULNA POWER COMPANY LTD.9.2 Cost EfficiencyImproved costefficiencyIndicators *1H 09 2008 2007 2006 2005Cost to Revenue Ratio (%) 87.24 93.93 90.46 91.31 87.52Administrative Exp to Revenue Ratio % 1.05 0.75 1.78 1.46 2.23Finance Cost to Revenue Ratio % 0.21 2.13 2.60 3.13 4.55* First Half growth of FY2009 has been annualizedThe cost efficiency (cost of goods sold to sales revenue) was improved in 1H of FY2009though the ratio was very high in the last several years. It stood at 87.24% in 1H2009 against93.93% in FY2008 and 90.46% in FY2007. As mentioned earlier, high oil prices and freightcharges in international market caused to high cost to revenue ratio. KPCL imports furnace oilfrom Singapore. C&F of fuel is calculated as the five day (immediately and after 2 days of dateof bill of lading) rolling average of MOPS (Mean of Platts Singapore). Contribution of rawmaterials cost to cost of goods sold increased 90.56% in FY2008 from 85.26% in FY2007;however, it was 84.86% in 1H of FY2009. It revealed that the price of heavy furnace oildecrease by 46.84% in 1H of FY2009 than FY2008, however, it was 65.37% higher in FY2008than FY2007.Finance cost to revenue decreased to 0.21% in 1H of FY2009 against 2.13% in FY2008 and2.60% in FY2007. Early payment of IFC term loan and preference share’s dividend, whichcharged against retained earnings induced to improve the finance cost to revenue ratio in 1Hof FY2009. Administrative expense to revenue ratio stood at 1.05% in 1H of FY2009 against0.75% in FY2008 and 1.78% in FY2007.10.0 CAPITAL STRUCTURE AND LEVERAGEIndicators *1H 09 2008 2007 2006 2005Leverage Ratio (X) 0.92 1.19 0.88 1.24 1.18Internal Capital Generation (%) 17.52 11.45 9.35 8.54 8.68Net Asset Value Per Share (Tk. 1000) 1196.52 1141.15 1585.79 1437.57 1327.18* First Half growth of FY2009 has been annualizedEquity basedcompanyKPCL is a sound equity based company with good contribution from long term loan in thecapital structure. At end of 1H of FY2009, the capital structure revealed that almost 74% ofthe net capital employed Tk. 3386.39 million was financed by equity i.e. Tk. 2,495.85 million.The equity pie is composed of 83.58% paid up capital and 16.42% retained earnings. Thecumulative preference shares are redeemable in five annual installments starting from 14May, 2010 at the second anniversary of the date of issue. By considering its nature, thesepreference shares are long term liability. The internal capital generation was good and stoodat 17.62% at end of 1H of FY2009 against 11.45% at YE2008. Other than Tk.113.44 millionpreference dividend, Tk. 208.59 million and Tk. 1200 million paid for FY2008 and FY2007respectively as cash dividend. Against the above equity structure, outside liabilities stood atTk. 2,264.58 million representing the leverage ratio 0.91 times as on 30 June 2009 against1.19 times at YE2008. The leverage ratio consists 0.36 as long term gearing and 0.56 as shortterm gearing. Net asset value per TK. 1000 share increased to Tk. 1196.52 at end of 1H ofFY2009 against Tk. 1141.15 at YE2008.11.0 LIQUIDITY AND FUND FLOW ANALYSISPage 8 of 15Indicators *1H 09 2008 2007 2006 2005Current Ratio (X) 0.99 1.06 1.30 1.15 1.13Quick Ratio (X) 0.83 0.60 0.82 1.00 0.90Cash Conversion Cycle 19 8 4 18 44* First Half growth of FY2009 has been annualized