KARACHI, Dec 28: Captive Power Plants (CPPs) experienced a particularly bad financial year 2001, as oil prices shot up, inflating the cost of production without corresponding increase in electricity tariffs, says a report prepared by Taurus Securities.

The net result of the above, the Report observes, was a sharp decline in profits of all CPPs. Captive Power Plants (CPPs) are those power plants, which belong to one particular group of companies and predominately operate to fulfil in-house power requirements of that industrial group.

Analysts say that the current scenario in the oil markets, however, bodes well for all power producers. Slowdown in demand has already kept prices depressed for a three-month period (Oct- Dec) and chances of any major price rally are limited.

The five major CPPs; their installed capacity and the average utilization include: Sitara Energy 365,467 Mwh, 82 per cent; Genertech Pakistan 208,926 Mwh, 82 per cent; Kohinoor Genertek 151,930 Mwh, 74 per cent; Ideal Energy 96,480 Mwh, 84 per cent and SG Power 84,954 Mwh, 61 per cent. SG Power was said to have the lowest capacity utilization in the group because of its constraint of a single buyer (SG Fibre).

SG Power usually uses natural gas for power generation. But during financial year 2001, it encountered some operational difficulties which compelled the company to switch to diesel generator which proved very expensive due to soaring oil prices. S.G. Power posted loss of Rs18 million, for the year, against profit of Rs21 million the earlier year.

Genertech Pakistan also plunged to a loss of Rs85 million compared with profit of Rs11 million in 2000. The other three CPPs posted profit, but lower than last year. After tax profit at Sitara Energy dipped to Rs55 million, from Rs174 million; at Kohinoor Genertek, it fell to Rs14 million, from Rs60 million and the taxed profit at Ideal Energy declined to Rs11 million, from a year ago after tax profit at Rs42 million.

Analysts say that from a yield perspective, Kohinoor Genertek looks the most attractive with 27 per cent prospective yield, followed by Sitara Energy with 18 per cent yield and Ideal Energy, producing an annual yield of 10 per cent.