PPL: Receivable collection improves to 113% in 4QFY24

*        PPL’s cash collections improves to 113% in 4QFY24, marking an increase of over 100% for the first time since 4QFY20. This represents a significant improvement compared to collections of 44% in 4QFY23 and 53% in 3QFY4.
*        The company attributed the rise in customer collection to the rationalization of gas prices, following three revisions in Jan’23, Nov’23 and Feb’24.
* In FY24, customer collection improved to 81%, up from 53% last year. More specifically, revenue recovery from SNGPL improved to 83% in FY24, compared to 34% in FY23, while SSGC’s recovery also improved, rising to 46% from 12% during the same period.
* The improving cash position would help the company pursue oil and gas exploration and enhance its reserve replacement ratio, which is critical for the sustainability of the production stream.
*        We maintain our ‘BUY’ stance on PPL with a Jun’25 TP of PkR155/sh and an 11% dividend yield for FY25E.
Courtesy – AKD Research

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