Ceylon Electricity Board Financial Performance – October 2018 Contents 01. Financial Highlights - Key Statistics.….………………………………………….….…….2 02. Operating Performance Highlights………………………………………………………...3 03. Analysis of Financial Performance ……..…………………………..………..………........4 04. Revenue……………………….……..………………………………………………………………..6 05. Expenditure....……..……………………………………………………………….....……............9 06. Cost Analysis - CEB Plants ……………………………….……..………………………..…..11 07. Cost Analysis - Private Power Producers………………………………..……......……13 08. Budget Variance Analysis………………………………………………………..…….....…..14 09. Assets……………………………………….………………….………………….……...................15 10. Liabilities……………………………………….………………….………………….……............18 11. Key Financial performance Indicators…………………………………………….…….19 12. Observations & Recommendations………………………………………………………..20 13. Income Statement…….………………………………………………………….….....Annex 01 14. Balance Sheet ……………………………………..……………………………….….....Annex02 15. Reconciliation of Accounting Loss with cash Flow……………………..…Annex03
Ceylon Electricity Board Financial Performance 2018
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01.
Financial Highlights
2017 Cum. October Average Tariff (Rs./kWh) 16.19 Average Cost per Unit (Rs./kWh) 19.83 Gross Units Sold (GWh) 11,239 Energy Sales 181,921 Other Income 7,563 Direct Generation Cost (Rs.Mn) 158,201 1 CEB Thermal Oil 49,919 2 CEB Thermal Coal 33,197 3 IPP 54,299 4 NCRE 20,786 O & M Cost (without tax) (Rs.Mn) 39,633 Depreciation (Rs.Mn) 25,005 Profit /(Loss) (Rs.Mn) (33,356) Capital Expenditure (Rs.Mn) 33,827
2018 Cum. Budget October October 16.21 16.14 18.69 18.96 11,748 12,011 190,438 193,850 6,359 10,541 139,744 142,275 34,399 36,093 33,537 33,426 48,429 44,780 23,379 27,977 53,988 58,764 25,784 26,666 (22,719) (23,315) 36,176 122,495
Revised Annual Budget 16.14 18.89 14,343 231,489 12,649 165,355 42,141 38,975 49,863 34,377 73,588 32,000 (26,805) 122,495 Graphic I – Revenue & OPEX
Table I- Key Statistics Source –CEB Financial statements 2018 & MI Reports
Generation & Sales GWh
Generation Mix – September 2018 & 2017
2017
Graphic II – Generation & Sales
Graphic III – Generation Mix
Ceylon Electricity Board Financial Performance 2018
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02. Operating Performance Highlights 2018 October Capacity Charge
Energy Charge
2017 October
CEB - Hydro
4,064
31
7,227
-
7,227
1.78
2,203
18
6,631
3.01
CEB - Thermal
1,623
12
10,867
34,080
44,947
27.69
2,215
18
57,161
25.80
CEB - Coal
4,609
35
10,523
33,855
44,378
9.63
4,586
37
41,094
8.96
IPP - Thermal
1,538
12
12,404
35,424
47,829
31.09
2,144
17
54,299
25.33
NCRE
1,417
11
-
23,379
23,379
16.50
1,174
10
20,786
17.70
600
600
127,339
168,361 19,102
12.71 1.63
12,323 1,084
100 8.80%
179,972 15,835
14.60 1.41
Transmission Cost - Rs.
7,866
0.67
4,826
0.43
Distribution Cost - Rs.
37,763
3.21
31,187
2.77
5,527
0.47
6,855
0.61
219,517
18.69
222,839
19.83
Net Account./Net Plus Generation Cost 13,251 100 System Loss 1,503 11.35%
41,021
Corporate Cost - Rs. Cost Sales Units
11,748
11,239
89%
Average Selling Price (Rs./kWh)
Units (GWh)
(Rs./ kWh)
Units (GWh)
%
Total Rs. Mn
(Rs./ kWh)
Description
%
Rs. Mn
91%
16.21
16.19
Sales Revenue - Rs. Mn.
190,438
181,921
Other Income - Rs. Mn.
6,359
7,563
Total Revenue - Rs. Mn.
196,797
189,484
Profit /(Loss ) Rs. Mn
(22,720)
(33,355)
(1.93)
(2.97)
Profit / (Loss) Per Unit (Rs./kWh) Table II- Operating Performance Highlights
Source –CEB Financial statements 2018
Ceylon Electricity Board Financial Performance 2018
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03. Analysis of Financial Performance 3.1 Monthly Profit / (Loss) for 2018 While analyzing the historical pattern of profit yields of CEB, it is evident for the first half of the year CEB tend to generate downward trend in profits, with dry weather conditions whereas at the latter part of the year CEB is recovering with monsoon rains. In the first quarterly financial performance of year 2018, continuous losses were incurred, with low levels of hydro generation. However the period of June to November (except July/Sep) were profitable with improved hydro conditions. (Refer Annex 1)
Graphic IV – Net Profit/ (Loss) 2018
Source –CEB Financial statements 2018
3.2 Historical Analysis of Profit / (Loss) As discussed above in the point No.3.1, the profit or loss of CEB in a particular year highly depends on the rainfall of that year. According to the past experience, if a year can have more than 35% contribution from hydro sources along with the full operation of Coal power plant, it will help to gain profits in that year assuming no any other major deviations. Year Profit/(Loss) - Rs.Mn. Generation Mix as a % Hydro CEB Thermal - Coal CEB Thermal - Oil IPP NCRE Total Table III- Historical Profit Analysis
2013 12,849 50 12 11 17 10 100
2014
2015
2016
2017
(17,285)
20,955
(14,499)
(47,299)
29 26 14 21 10 100
37 34 8 9 11 100
25 36 17 15 8 100
21 35 18 17 10 100
2018 (Oct) (22,719) 31 35 12 12 11 100
Source –CEB Financial statements 2018 & MI Reports Ceylon Electricity Board Financial Performance 2018
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3.2.1 Contribution of Hydro Source
Graphic V– Financial Performance 2014-2018
Graphic VI – Hydro units 2014-2018
However with the escalation in commodity prices, namely fuel and coal, CEB was unable to relish on the improved hydro conditions as direct generation cost was escalating simultaneously with increasing demand (Year 2015 was profitable with Rs.20Bn net profits with comparatively less demand and therefore hydro generation was 37%). Particularly the market prices of fuel keep on soaring and CEB has to endure the financial difficulties with the unchanged tariff structure since year 2013.
Ceylon Electricity Board Financial Performance 2018
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04. Revenue 4.1 Electricity Sales Revenue, Cost & Margin Analysis Year
No.of Units (GWh)
Avg.Tariff (Rs./kWh) 18.27 18.50 16.01 16.18 16.22 16.21
Sales Revenue* (Rs.Mn.) 194,147 202,645 188,684 206,811 218,450 190,438
Total cost (Rs.Mn.) 179,991 222,976 177,754 231,113 273,194 219,517
2013 2014 2015 2016 2017 2018 (Oct)
10,628 11,063 11,786 12,785 13,431 11,748
Table IV- Electricity Sales
Source –CEB Financial statements 2018 & MI Reports
Margin Profit/(Loss) (Rs.Mn.) per Unit Rs./kWh 14,156 1.33 (20,331) (1.84) 10,930 0.93 (24,302) (1.90) (54,744) (4.08) (29,079) (2.48)
*Considered only the electricity sales income. It is evident that the cost is escalating at a rapid rate in the recent past with rising commodity prices and the financial management has become a tedious task with fixed tariff rates. In 2013 CEB yielded Rs.18.50/ kWh where as it was brought down nearly by Rs.2.50/ kWh with revised tariff structure announced in 2014.
4.2 Sales Category wise Analysis
Graphic VII – Category wise Tariff
Note: Since no value demonstrated for Street Lighting as it is embedded in all other tariff categories, the estimated number of units is also not shown in the above graph.
Ceylon Electricity Board Financial Performance 2018
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4.2.1 Sales Growth (YOY)
Units Sold (GWh) Sales (Rs.Mn) Table V- Revenue Analysis
2018 (Oct) 11,748 190,438
2017 (Oct) 11,239 181,921
Growth % 5 5
Source –CEB Financial Statements 2018 / System Control Report
4.2.2 Analysis of Sales Growth by Unit and Rate Variance Rs. Mn. Sales - 2017
181,921
Add Increase due to Unit Increase
8,240
Actual Sales @ 2017 Rate
190,161
Add Increase in Revenue due to Rate variance Sales - 2018 Table VI– Energy Sales
277 190,438
Source –CEB Financial Statements 2018 / System Control Report
4.3 Sales & Collection During the recent past, the average collection was 99% of sales made during that year. However, it is noted that there is a delay in collecting cash from long outstanding consumers mainly who are in the ‘more than 3 year’ bucket in the Debtors’ Age Analysis.
Ceylon Electricity Board Financial Performance 2018
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4.4 Subsidy and Surplus by CEB to Consumers
Graphic VIII – Subsidy/ surplus 2018
Source – CEB IT / CEB Financial statements 2018
Electricity tariff is offered at a price which is lower than the cost, to consumers at low consumption level in domestic category and most of the other categories excluding general purpose. Hence the high end consumers in domestic category/ general purpose category have to bear the part of this cost in excess. As at 31st October 2018, the total subsidy amounts to Rs.48 Bn and the surplus was recorded at Rs.19Bn before adjusting other income.
4.5 Other Income
Dividends declare for year 2018 by LECO (Pvt) Ltd and LTL Holdings (Pvt) Ltd will be recorded in November Financial statements approximating to Rs.2.1 Bn. Graphic IX – Other Income 2018
Source – CEB Financial statements 2018 Ceylon Electricity Board Financial Performance 2018
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4.6 System Energy Loss In the period under review Transmission & Distribution Losses was recorded at 11.35%. The estimated loss is given below: Division
Unit Loss (GWh)
Transmission
398
Generation cost Per unit (Rs./kWh) 12.71
Estimated Energy Loss (Rs.Mn) 5,051
Distribution
1,106
12.71
14,051
Total
1,503
12.71
19,102
Table VII – System Loss
05.
Source – CEB Financial statements 2018/MI Reports
Expenditure
5.1 Capital Expenditure
Capital Budget Percentage of CAPEX utilised
24%
Summary (Rs.Mn)
70,000
TOTAL CAPITAL BUDGET
60,000
122,495
50,000
TOTAL ACTUAL EXPENDITURE
40,000
36,176
30,000
TOTAL UNULTILIZED BUDGET
20,000
86,319
10,000
60,000 53,618
17,730 11,874
8,876 6,571
Borrowings
I.C.G.
Budget
C.C.
Actual
CAPEX utilization indicates slow progress over the period, even though the budget has been allocated among capital works to the full extent. In recent past the CAPEX utilization is less than 50% of the budgeted requirement and in 2017 it was 43%. With the prevailing financial constraints, it is important to revisit the capital budget estimates by considering the priorities and the rate of utilization of projects.
Ceylon Electricity Board Financial Performance 2018
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5.2
Recurrent Expenditure
2018
Direct Generation Cost 64%
Others 6%
Dep 12%
Finance 2%
Personnel 13%
Direct Generation Cost 71% Others 5%
Dep 11%
Finance 2% Material 2%
Material 3%
Graphic X – Recurrent Expenditure
2017
Personnel 9%
Source –CEB Monthly Accounts 2018
5.3. Cost Analysis
Graphic XI – Expenditure
Source –CEB Monthly Accounts 2018
The total cost of the year under review is similar to the previous year, even though the direct generation cost is Rs.18Bn higher in year 2017 compared to this year. However operation and maintenance cost of year 2018 is comparatively high with the revised salaries.
Ceylon Electricity Board Financial Performance 2018
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06. Cost Analysis – CEB Plants 6.1 Cost per unit Summery – Thermal Plants (Rs./kWh)
Graphic XIII - Generation Cost per Unit
Source – Generation Division CPU statement 2018
6.2 Cost per unit – Thermal Plants (Rs./kWh)
KPS (GT) holds the highest finance cost and the total cost per unit is Rs.49.45/kWh. For the KPS (CCY) it was Rs.25.91/kWh during the period. KPS GT- Kelanitissa Gas CCY - Combined Cycle
Coal cost per unit Ceylon Electricity Board Performance The Lakvijaya power plant recorded a cost per unit of Rs.9.58 in 2018 and itFinancial was recorded at 2018 Rs.8.88 in 2017. Increase of coal prices (including VAT) is the main reason for this variance.
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Graphic XIV - Generation Cost per Unit
Source – Generation Division CPU statement 2018
6.3 Analysis of Thermal Coal Contribution
Graphic XV- Generation Cost per Unit
Source – Generation Division CPU statement 2018
6. 4 Cost per Unit- CEB Hydro Plants Energy (Rs.) Complex
GWh
Spares
Capacity (Rs.)
Variable Personnel Unit Cost
Depn
Other Cost
2018 2017 Overhead Capacity (LKR/ (LKR/ (Indirect) Unit Cost kWh) kWh)
Mahaweli
2,187
0.03
0.03
0.38
1.24
0.07
0.09
1.77
1.80
3.93
Laxapana
1,281
0.05
0.05
0.39
0.71
0.04
0.12
1.26
1.31
1.74
Samanala
596
0.18
0.18
0.81
1.37
0.16
0.18
2.52
2.70
3.77
0.06
0.44
1.09
0.07
0.11
1.72
1.78
3.01
Overall Hydro
4,064
Table IX - Hydro Cost per Unit
0.06
Source – Generation Division CPU statement 2018
Ceylon Electricity Board Financial Performance 2018
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07. Cost Analysis - Private Power Producers 2018 Cost GWh (Rs. Mn) 1,538 47,828 1,420 23,379 2,958 71,208
Thermal Renewable Energy Total
(LKR/ kWh) 31.09 16.47 24.07
Table X – Direct Generation Cost- Private
2017 Cost (LKR/ GWh (Rs. Mn.) kWh) 2,144 54,299 25.32 1,174 20,786 17.71 3,318 75,085 22.63
Change Cost GWh (Rs. Mn) (606) (6,471) 246 2,594 (360) (3,877)
Source –CEB Financial statements 2018/ System Control Reports
07.1 Renewable Energy GWh Mini Hydro Wind Solar Others Total
910 305 67 138 1,420
2018 Cost (Rs. Mn) 13,800 6,232 1,551 1,796 23,379
(LKR/ kWh) 15.17 20.46 23.08 13.03 16.47
Table X – Direct Generation Cost- Private
2017 Cost (LKR/ GWh (Rs. Mn.) kWh) 718 10,669 14.85 337 7,609 22.55 118 1,174
2,507 20,786
21.28 17.71
Change Cost GWh (Rs. Mn) 192 3,131 (33) (1,377) 20 246
(711) 2,594
Source –CEB Financial statements 2018/ System Control Reports
7.2 IPP Thermal IPP
56 202 315 909 20 37 -
2018 Cost (Rs. Mn) 2,270 5,662 7,726 29,201 512 1,965 492
(LKR/ kWh) 40.83 27.97 24.51 32.13 26.20 53.40 -
1,538
47,828
31.09
GWh
Asia Power Sojitz Kelanitissa ACE Power Embilipitiya West Coast ACE Power Mathara Aggreko Northern Power Total
GWh 95 413 463 953 9.93 211 2,144
2017 Cost (LKR/ (Rs. Mn.) kWh) 3,836 40.58 9,628 23.30 10,571 22.84 28,795 30.23 224 22.56 559 686 54,299
25.32
Change Cost GWh (Rs. Mn) (39) (1,566) (211) (3,966) (148) (2,845) (44) 406 10 288 (174) 1,406 (194) (606)
(6,471)
Source –CEB Financial statements 2018/ System Control Reports
Table XI– Direct Generation Cost-IPP
Above statement does not incorporates the emergency power generated through Aggreko, and ACE Mathara for year 2017 , as the subsidy (given by Treasury )of Rs.6Bn has been adjusted to the cost.
7.3 Analysis of Energy cost and Capacity Cost of IPP thermal Capacity Charge Power Plant
GWh (Rs. Mn)
Asia Power 56 Sojitz Kelanitissa 202 ACE Power Embilipitiya 315 West Coast 909 ACE Power Mathara 20 Aggreko 37 Northern Power Total 1,538 Table XII– IPP cost analysis
990 419 783 8,617 95 1,008 492 12,404
Energy charge
Other charges
Total Cost
(LKR/ (LKR/ (LKR/ (Rs. Mn) (Rs. Mn) (Rs. Mn) kWh) kWh) kWh) 17.80 1,167 20.99 113 2.04 2,270 2.07 4,814 23.78 429 2.12 5,662 2.48 6,563 20.82 380 1.20 7,726 9.48 18,936 20.84 1,648 1.81 29,201 4.87 402 20.56 15 0.77 512 27.39 957 26.01 1,965 492 8.06 32,839 21.35 2,585 1.68 47,828
(LKR/ kWh) 40.83 27.97 24.51 32.13 26.20 53.40 31.09
Source –CEB Financial statements 2018 / System Control Repor Ceylon Electricity Board Financial Performance 2018
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08. Budget Variance Analysis 8.1.2 Category-wise O & M Cost Description
Actual 2018 Rs.Mn
Budget 2018 Rs.Mn
Actual 2017 Rs.Mn
Variance with Variance with Budget 2018 Actual 2017 Amount Amount % % Rs.Mn Rs.Mn 1,985 7 7,138 34 947 10 1,607 23 683 38 73 7 411 12 422 16 3,228 33 1,412 27 1,236 100 733 0 34 (2) 114 (6)
Personnel Material Accommodation Transport & Communication Other cost Material Price Variance Overhead Recoveries
27,839 8,559 1,130 3,032 6,625 (1,236) (1,661)
29,824 9,506 1,813 3,443 9,852 (1,627)
20,701 6,952 1,057 2,611 5,213 (1,969) (1,776)
Sub Total before Finance Cost Finance cost IPP Delay Interest CPC Delay Interest
44,287 5,731 1,461 2,508
52,811 3,996 1,957 -
32,789 4,076 1,283 1,486
8,524 (1,735) 496 (2,508)
16 (43) 25 -
11,499 1,654 179 1,022
35 41 14 -
Sub Total before Depreciation Depreciation Total
53,988 25,784 79,772
58,764 26,666 85,431
39,633 25,005 64,639
4,776 882 5,659
8 3 7
14,354 779 15,133
36 3 23
Table XIII – Operation & Maintenance Cost
Source –CEB Financial statements 2018 / Budget 2018
Based on the above Table XIII, it makes an understanding that there is over budgeting on expenditure. However, it is the normal situation of early months of every year and it will reduce the difference between budget and the actuals in the latter part of the year with recording of all the expenditure.
8.1.3 Division-wise O & M Cost
Description
Actual 2018 Rs.Mn
Budget 2018 Rs.Mn
Actual 2017 Rs.Mn
Generation Transmission Distribution Divison 01 Distribution Divison 02 Distribution Divison 03 Distribution Divison 04 Corporate Interest on Bank OD & Loans Interest on IPP Delayed Payments Interest on CPC Delayed Payments
10,206 2,823 6,779 9,886 5,728 5,051 3,815 5,731 1,461 2,508
15,248 3,386 7,904 10,170 5,131 5,019 5,954 3,996 833 1,121
6,616 1,770 5,809 7,674 4,106 3,893 2,919 4,076 1,283 1,486
Total
53,988
58,762
39,633
Table XIV – Operation & Maintenance Cost
Variance with Variance with Budget 2018 Actual 2017 Amount Amount % % Rs.Mn Rs.Mn 5,042 33 3,590 54 562 17 1,053 59 1,125 14 970 17 285 3 2,211 29 (596) (12) 1,622 39 (32) (1) 1,158 30 2,139 36 895 31 (1,735) (43) 1,654 41 (628) (75) 179 14 (1,387) (124) 1,022 4,774
8
14,354
36
Source –CEB Financial statements 2018 / Budget 2018
Note: Corporate cost includes cost of projects Division/AM Division and HQ. Corporate Strategy Division is captured under HQ. Ceylon Electricity Board Financial Performance 2018
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09. Assets 09.01 Inventory (Excluding Goods in Transit) The following table shows the level of inventory, consumption and stock holding period as at 30th October 2018.
Division
Generation
Balance As at 31.12.2017(Rs. Mn.)
Obsol & Average Stock Balance As at unserviceable Monthly Holding 31.10.2018 Stock Consumption Period (Rs. Mn.) (Rs. Mn.) (Rs.Mn.) in Months A* B C D=A/C
7,139
2
6
3,641
2
8
4,383
3,425
1.28
9
97
920
44
21
1
Spares Others
2,445 297
2,095 1,323
(16)
20 8
102 156
0.12 0.08
DD 01
6,378
7,532
(718)
862
9
1
DD 02
6,119
6,653
(383)
1,167
6
2
DD 03
3,463
3,221
(41)
982
3
4
DD 04
2,681
3,023
(103)
438
7
2
AM Transmission
69 85
75 181
(25) -
7 22
11 8
1 1
CEB
37,923
35,101
(1,285)
10,617
3
4
Coal
19,127
14,417
11,900
5,696
4,388
Oil - Fuel Oil - Lub Oil
(16)
Stock Turnover in times E=12/D
-
Note 01
Note 02
A* - Balance before adjusting obsolete & unserviceable Stocks and Price Variance. Table XV- Inventory Source –CEB Financial Statements 2018
Note 01: In Generation Division, as the process of taking spares in to the inventory and the introduction of computerized spares management system is in progress; average monthly consumption is not entered due to the unavailability of accurate data. Note 02: Average monthly consumption of Transmission Division shows the figure calculated for the year 2017. This figure is calculated only at the yearend stock verification
Graphic XVI- Stock Information
Source – CEB Financial statements 2018/MIR Reports 2018 Ceylon Electricity Board Financial Performance 2018
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Distribution Divisions maintain their stock turnover in between 1-4 times. However, every division needs to monitor their stocks including obsolete & unserviceable stocks properly in order to avoid unnecessary cash stagnating. 09.02 Trade Debtors – Age Analysis (Without Finalized Accounts)
Rs. Mn DD 1 DD 2 DD 3 DD 4 Transmission Total As a % of Total
As a % of Total
Total Debtors
33 28 14 12 12 100
6,577 5,588 2,765 2,348 2,416 19,694 100
Table XVI– Trade Debtors Age analysis
Rs. Mn Ordinary Supply As a % of OS Heavy Supply As a % of HS Total As a % of Total
As a % of Total
0-1 2-3 4-12 1-2 Months Months Months Years 3,947 3,096 2,116 2,037 1,362 12,558 64
73 100
904 520 156 165 1,745 9
295 364 31 24 714 4
79 258 11 (1) 346 2
Over 3 Years 212 58 26 2 299 2
Source –MI Reports
Total Debtors 5,353 100 14,341 100 19,694 100
27
1,139 1,292 426 120 1,054 4,032 20
2-3 Years
Table XVII– Trade Debtors Age analysis
0-1 2-3 4-12 1-2 Months Months Months Years 1,933 1,790 958 329 36 33 18 6 10,625 2,241 787 385 74 16 5 3 12,558 4,032 1,745 714 64 20 9 4
2-3 Years 91 2 254 1.77 346 2
Over 3 Years 250 5 48 0.34 299 2
Source –MI Reports
9.03 Trade Debtors- Receivable Position
Receivable Position (No of Months) - Without Finalized Accounts
2018 October Division
Ordinary Supply
Heavy Supply
Total
2018 September
DD 01
0.79
1.41
1.09
1.09
DD 02
0.44
1.42
0.95
0.91
DD 03
0.49
1.27
0.88
0.89
DD 04
0.54
1.35
0.88
0.85
Transmission
-
1.28
1.28
0.83
Total
0.59
1.36
1.00
0.95
Table XVIII– Trade Debtors Receivable Position
Source –MI Reports
Ceylon Electricity Board Financial Performance 2018
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Heavy Supply without Finalized Account
2018 October
2018
Total Dues (Rs. Mn)
Average Billing (Rs. Mn)
Government
1,985
894
2.22
2.22
Private
7,856
6,063
1.30
1.28
Semi Government
2,059
1,676
1.23
1.18
LECO
2,440
1,892
1.29
0.84
Total
14,341
10,525
1.36
1.26
Table XIX– Trade Debtors Receivable Position
No.of September Months
Source –MI Reports
10. Liabilities 10.01 Major Creditors Rs. Mn CPC IPP Thermal Renewable Energy Total
As At 31.10.2018 35,611 22,897 4,771 63,279
As At 31.10.2017 35,611 23,167 4,771 63,549
As At 31.12.2017 47,513 24,786 4,066 76,365
Table XX– Major Creditors by Source –CEB Financial Statements 2018
As a result of the weakened financial position in year 2018, payables to CPC and IPP thermal have increased significantly compared to previous year.
10.02 Borrowings 10.02.01 Bank Overdraft Bank Ovedraft - People's Bank OD Limit As at 31st December 2017 As at 31st October 2018 Table XXI– Bank Borrowings
Bank Balance Rs. Mn
Interest for the period Interest Rate Rs. Mn
(7,000)
(7,172)
846
14.37%
(800)
(1,516)
304
14.55%
Source –CEB Financial Statements 2018
Ceylon Electricity Board Financial Performance 2018
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10.02.02 Bank Loans Source
Granted Date
Principal Amount
Rs. Mn Interest Rate Balance as at Balance as at (%) 31.10.2018 31.12.2017
People's Bank
2-Apr-13
4,110
881
1,370
9.53
People's Bank
30-Jan-13
17,650
3,370
5,470
9.53
NSB
31-Dec-14
10,000
5,625
6,250
8.96
People's Bank
30-Apr-15
Euro 2087
2,676
2,610
9.03
People's Bank
30-Dec-16
5,000
1,250
3,750
14.52
People's Bank (for coal)
12-Dec-17
9,991
6,078
1,341
12.92
People's Bank (for CPC)
24-Jan-18
10,000
7,860
-
13.45
People's Bank (for OD)
1-Feb-18
6,200
5,591
-
-
People's Bank (for CPC)
1-Apr-18
10,000
10,000
-
-
People's Bank (for CPC)
2-May-18
15,000
15,000
-
-
People's Bank (for CPC)
3-Jul-18
10,000
10,000 68,331
Table XXII– Bank Borrowings
Source –CEB Financial Statements 2018
During the year 2018, CEB has obtained Rs.8,651 Mn. for coal purchases and Rs.45,000 Mn. for CPC/IPP settlements from People’s Bank. Further Rs.6,200 Mn has obtained to settle the tempory overdraft of Rs.7,000Mn to Rs.800 Mn (permanent OD facility).
11. Key Financial Performance Indicators I. Receivable Position (without Finalized Accounts) Division
Ordinary Supply (In Months)
DD 01 DD 02 DD 03 DD 04 Transmission Total
*Total Dues Average Billing
0.79 0.44 0.49 0.54 0.59
=
Heavy Total Dues Supply (Rs. Mn) (In Months) 1.41 1.42 1.27 1.35 1.28 1.36
6,577 5,588 2,765 2,348 2,416 19,694
Average Billing (Rs. Mn) 6,025 5,912 3,159 2,656 1,888 19,640
In Overall Months Ranking 1.09 0.95 0.88 0.88 1.28 1.00
5 3 1 1 4
Receivable Position
Ceylon Electricity Board Financial Performance 2018
P a g e | 19
II. Stock Holding Period
Division
Inventory (Rs. Mn.)
Average Inventory Consumption Turnover per month (in times) (Rs. Mn.)
Generation Transmission DD 01 DD 02 DD 03 DD 04 AM
14,417 181 7,532 6,653 3,221 3,023 75
7,139 22 862 1,167 982 438 7
Total
35,101
10,617
*Average Inventory Monthly Consumption
*12 Stock Holding periods in months
=
=
Holding period In Ranking Months
6 1 1 2 4 2 1 4
2 8 9 6 3 7 11 3
1 5 6 3 2 4 7
Stock Holding Period in months
Inventory Turnover in times
12. Observations & Recommendations 12.1 Impending Financial Difficulties for CEB 12.1.1 Observation When analyzing the history of financial performance of the CEB, it is observed that CEB is moving towards a financial crisis situation. Therefore it is vital to make the situation less aggravate to steady the financial position using following recommendations. 12.1.2 Recommendations a) In the Corporate Intent (2017-2019), which was prepared for all prominent State owned enterprises, CEB was allowed a 10% tariff increase from year 2018. Nevertheless no tariff increase is approved since year 2013, and CEB is under a heavy financial burden. Therefore the government and the PUCSL (Public Utilities Commission of Sri Lanka) has to be persuaded for immediate implementation of the cost pass through tariff mechanism for CEB. b)
If above (a) cannot be persuade, request for the Government subsidy / or kind of financial assistance (Advance from the Treasury or low interest commercial loan) to conquer the present crisis situation.
Ceylon Electricity Board Financial Performance 2018
P a g e | 20
12.2 Increased stock holding period 12.2.1 Observation When consider the stock holding period (in months), it was noted that Division 01,02, 04, held stock for nearly 09, 06 and 07 months. Further, it is important to take necessary action to remove obsolete and unserviceable stocks included in inventory, as in AM division, 32% of the stock is counted as obsolete and unserviceable stocks) 12.2.2 Recommendation It is recommended to pay due consideration for appropriate lead time and stock holding cost when procurements are made and action to be taken to remove obsolete material form the stocks. It is further recommended to set up benchmark and assign targets to each division. 12.3 Improvements in Trade debtor receivable position 12.3.1 Observation CEB maintains 0.59 (18 days) as the ordinary billing receivable position and 1.36 (41 days) as the bulk supply billing receivable position as at the end of the period under review. According to the existing billing and payment system, it is observed that it takes 03-04 weeks to update the system from the meter reading date which cause the delay in submitting actual sales in distribution divisions and duplicate the data entering process. 12.3.2 Recommendation It is recommended to further improve the bulk supply receivable position in all divisions and to develop a mechanism to accounts the billing information on line real time. 12.4 Utilization of CAPEX Budget and updating information 12.4.1 Observation Based on the figures of recent past , in year 2017, it is identified that the actual CAPEX utilization is less than 45% of budgeted requirements. Further, the information on capital expenditure against the budget is not received on time. 12.4.2 Recommendation More attention to be paid in providing information in a timely manner as the information is requested by the management as well as by third parties (MOPE, Treasury etc.) time to time. Further, it is important to revisit the Capital Budget estimates by considering the priorities and the rate of utilization of projects after six months to avoid forecasting errors Ceylon Electricity Board Financial Performance 2018
3,055
CEB Coal
(3,980)
(2,863)
-
-
(3,147)
Net Profit/(Loss) Afte r Tax
(4,527)
-
(3,147)
-
(4,527)
133
IPP/CPC delay charges Net Profit/(Loss) Before Tax
Taxation Other Comprehensive Income
155
151
391
566
(4,546)
(3,417)
554
22,373
6,593
4,855
21,519
2,541
Finance Cost
Other Income Net Profit Before Finance Cost
Total Cost Operating Profit/(Loss)
Depreciation Operation & Mainte nance Cost
2,536
320
240
- Corporate
335
2,409
186
1,323
988
- Distribution
570
- Transmission
O & M - Generation
15,780
(7,028)
(7,028)
210
514
(6,304)
570
(6,873)
25,435
7,083
2,568
313
2,827
303
1,071
18,352
(2,834)
-
-
(2,834)
180
416
(2,238)
602
(2,840)
21,589
7,144
2,558
374
2,780
333
1,098
14,446
(1,540)
-
-
(1,540)
151
543
(845)
671
(1,517)
20,942
7,111
2,613
390
2,765
381
963
13,831
71
-
71
1,967
588
2,625
542
2,083
17,335
7,143
2,605
368
2,772
308
1,091
10,192
(2,152)
-
-
(2,152)
174
883
(1,095)
532
(1,627)
20,568
7,214
2,603
445
2,946
91
1,130
13,354
2,936
153
-
-
153
109
658
920
689
230
19,471
6,715
2,510
458
2,663
283
802
12,756
3,023
4,546
3,130
2,056
19,702
Aug
5,575
4,210
2,471
19,932
Sep
1,906
3,583
1,404
19,782
Oct
(4,160)
-
-
(4,160)
777
810
(2,573)
1,003
(3,576)
23,508
8,802
2,611
671
3,598
308
1,612
2,444
-
-
2,444
114
777
3,334
630
2,704
17,077
7,413
2,640
235
3,360
297
882
9,664
14,706
16,663
3,920
5,353
2,838
2,226
18,941
Jul
113
2,888
2,721
2,288
1,263
19,418
Jun
487
1,675
4,137
3,429
3,377
19,425
May
Direct Generation Cost
1,314
5,128
3,283
4,360
18,750
Apr
2,659
1,418
6,880
4,125
6,032
18,561
Mar
1,962
1,584
5,510
3,594
5,258
17,827
Feb
2018 (Rs.Mn)
Renewable Energy Net Accounting/Net Plus
6,072
IPP Thermal
Purchased Power
5,953
18,101
CEB Fuel
Expenditure
Sales Revenue
Jan
Actual
3,830
-
-
3,830
61
655
4,546
888
3,658
15,476
6,611
2,401
363
2,729
275
843
8,865
73
2,484
1,733
2,876
1,700
19,134
Nov
(6,154)
-
-
(6,154)
196
918
(5,040)
2,854
(7,894)
27,676
11,021
2,667
884
7,471
16,654
56
2,484
6,096
2,601
5,417
19,782
Dec
Budget
(25,044)
-
-
(25,044)
4,226
7,304
(13,513)
10,101
(23,614)
252,968
87,704
30,852
5,061
30,173
3,098
18,520
165,264
729
28,347
55,658
-
39,014
41,516
-
229,354 -
Total
(47,299)
(1,338)
(231)
(45,730)
3,675
4,740
(37,314)
8,782
(46,096)
264,547
79,946
29,970
4,325
30,657
3,268
11,727
184,601
24,912
64,341
37,505
57,842
218,450
Annual 2017
P a g e | 21
Annex 01
Income Statement - For the Period ending 30th November 2018 and the forecasted values for the month of December
Ceylon Electricity Board Financial Performance 2018
P a g e | 22
Balance Sheet- As at 31st October 2018 ASSETS
Annex 02 2018
2017
Rs.Mn
Rs.Mn
Non-Current Assets Property, Plant & Equipment -Cost
736,642
708,648
Investment in Subsidiaries
912
912
Investment in Joint Venture
329
329
Investments of Insurance Reserves Fund
7,942
7,111
Other Financial Assets
6,476
4,436
973
973
753,274
722,408
0.08
1,022
Inventories
33,459
27,511
Trade and Other Receivables Other Financial Assets
59,223 2,540
59,342 2,075
2,066
1,188
97,288
90,116
850,562
813,546
302,695
302,695
33,203
31,145
9,385
45,907
345,283
379,747
Other Non Current Assets Non Current Assets Held For sale Current Assets
Cash and Cash Equivalents Total Assets EQUITY AND LIABILITIES Capital & Reserves Contributed capital Reserves Retained Earnings /(Loss) Total Equity Non-Current Liabilities and Deferred income Interest bearing loans & Borrowings Consumer Deposits Provisions & Other Deferred Liabilities Deferred income
-
-
271,648
205,080
14,116
13,427
8,622
7,262
83,820
80,476
378,206
306,246
108,614
105,497
1,462
1,665
16,996
20,392
127,072
127,553
850,562
813,546
Current Liabilities Trade and Other Payables Income Tax Liabilities Interest Bearing Loans & Borrowings Total Liabilities Total Equity and Liabilities
Ceylon Electricity Board Financial Performance 2018
P a g e | 23
Annex 03
Statement of Reconciliation of Accounting Loss with Cash Flow For the Period ending 31st October 2018 Rs. Mn Net Loss
(22,720)
Depreciation
25,784
Collection over Accrued revenue
2,975
Cash deficit
6,040
Loans Sub Total
59,849
59,849 65,888
(Settlement)/Deferment Direct Generation Cost: CPC
(11,827)
Coal
3,941
IPP
(2,743)
NCRE (Deferement)
631 Sub Total
(9,998)
Other Settlements Repayments of Loans Net investment in Capital Projects/Jobs/PPE Loans & Advances paid to staff Settlement of other operation & maintenance cost Sub Total Net cash flows during the period OD Balance as at 31.12.2017 (OD) Balance as at 31.10.2018
(16,206) 458 (5,713) (29,777) (51,239) 4,652 (7,172) (2,520)
Ceylon Electricity Board Financial Performance 2018
