KSEB’s losing streak continues despite higher revenues

Kerala’s sole power supplier’s negative net worth reaches a whopping Rs35,053cr

CL Jose

THIRUVANANTHAPURAM: Reporting loss is unlikely to give a shock to the Kerala State Electricity Board Ltd (KSEBL), the all-powerful power supplier in the state, as rolling out loss year after year is now the rule rather than the exception.

And no different is this year too. The loss for the financial year 2023-24 is Rs737.78 crore compared with Rs1,022.62 crore loss  in the earlier year. A relatively small loss in the fourth quarter (Q4) at Rs18.86 crore has saved the company from posting a much higher loss for FY24.

And the small fourth-quarter loss can well be attributed to an exceptional item in the fourth quarter financial statements that handed out Rs767.72 crore to the company’s coffers.

The details of that ‘exceptional item’ have essentially been explained in the ‘Note No 39’ of the financial statements, but that part of the statements has not been available to businessbenchmark.news.

Prompt reporting

But the promptness at which KSEB management has been disclosing financial results in the past few years needs to be acknowledged as it’s comparable to any listed companies in the country.

Mind you, most Kerala government owned companies are years behind KSEB in this regard. Even the latest financial statement posted on the website by KSIDC is from the year 2021-22 (FY22), let alone other companies.

Negative net worth & large borrowings

One thing that has been consistently growing for KSEB is its negative net worth. KSEB, with a paid-up capital of Rs3,499.05 crore, has now reached a sorry state where not only has the entire paid-up capital been eroded, but it has also plunged to a negative net worth of Rs35,053.15 crore.

The company’s book carries total borrowings to the tune of Rs16,090.67 crore with the long term borrowings amounting to Rs13,328.02 crore and the short term debt at  Rs2,762.65 crore as of March 31, 2024.

Top line grows

The company has experienced a fairly good top line growth during the fourth quarter as well as for the whole financial year (FY24) with the Q4 revenue from operations having grown to Rs5,449.42 crore from Rs4,607.67 crore for the comparable period last year.

For the full year too, the revenue from operations improved from Rs18,453.27 crore to Rs20,173.76 crore year-on-year. But the finance cost, mainly the interest cost, for the fourth quarter was Rs1,284.56 crore against Rs456.81 crore a year ago, which has certainly dent the bottom line.

Qualified conclusion

This time too, the auditors have made a ‘qualified conclusion’ on the quarterly financial statements for the period ending March 31, 2024. This signifies the auditors’ concerns about certain aspects of the financial statements.

Seriously enough, qualifying the KSEB accounts has been a ritual for some time now. “It’s not known whether the regulators have taken steps to address this,” said a financial analyst while talking to businessbenchmark.news.

It may be recalled, last year the office of the Comptroller and Auditor General of India (CAG) had stepped in and instructed KSEB to restate its accounts following the qualified opinion expressed by the auditors.