Halmore Power Generation Company Limited

RATING REPORT | Mar-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
09-Mar-26 AA- A1 Stable Maintain -
21-Mar-25 AA- A1 Stable Maintain -
22-Mar-24 AA- A1 Stable Maintain -
22-Mar-23 AA- A1 Stable Maintain -
22-Mar-22 AA- A1 Stable Upgrade -
About the Entity

Halmore Power Generation Company Limited, incorporated in 2005 under Pakistan's Power Policy 2002, operates a 225 MW dual-fuel combined cycle gas turbine plant in Bhikhi, Sheikhupura, on a Build-Own-Operate basis. The plant achieved commercial operations in June 2011 and sells electricity to CPPA-G under a 30-year Power Purchase Agreement expiring in 2041. The Company is 99.99% owned by UK-based Mian Karim Ud Din. The Board, chaired by Mr. Karim Ud Din, includes the CEO, Mr. Mahmood Akbar, and two family representatives.

Rating Rationale

The ratings reflect Halmore Power Generation Company Limited's established position as an Independent Power Producer, supported by long-term contractual arrangements under the 2002 Power Policy. The Company operates a 225 MW dual-fuel combined cycle plant under a 30-year Power Purchase Agreement with CPPA-G, backed by a sovereign guarantee. Revenue stability is underpinned by capacity payments, contingent on meeting availability benchmarks (88% required), while energy payments are linked to actual generation. During FY 25, the plant demonstrated sound performance, achieving 95% availability well above the required threshold, and generation stood at 364 GWh. Operational risks are mitigated through a long-term O&M agreement with General Electric, guaranteeing output and heat rate, and fuel supply is secured via agreements with SNGPL (gas) and PSO (HSD). Insurance coverage for property damage and business interruption is adequate. In the context of sector-wide power sector reforms, negotiations were undertaken with IPPs to transition existing tariffs to a hybrid model; however, IPPs with foreign shareholding, including the Company, retained their original contractual terms, and accordingly, Halmore’s tariff structure remains unchanged with no modification to the PPA framework. Notwithstanding these strengths, liquidity management continues to be influenced by persistent circular debt in the power sector, reflected in elevated trade receivables of PKR 8,946 million. Although the release of certain outstanding payments following tariff-related discussions provided liquidity comfort, the Company continues to carry significant receivable balances and relies on short-term borrowings amounting to PKR 6,545mln to bridge working capital gaps, indicating that utilization of borrowings remains material.

Key Rating Drivers

Sustained operational performance, continued adherence to availability benchmarks, and disciplined financial management remain critical to maintaining the Company's credit profile. The sovereign guarantee on receivables and the stable capacity-based payment structure provide comfort. Additionally, any adverse changes in the regulatory framework or contractual environment may impact the ratings.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Halmore Power Generation Company Limited


Rating Analysis

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Profile
Plant

Halmore Power Generation Company Limited ("Halmore Power" or "the Company") is a privately held entity that owns and operates a 225 MW Combined Cycle Gas Turbine (CCGT) power plant in Bhikhi, Sheikhupura, Punjab. The plant was developed on a Build-Own-Operate (BOO) basis and has been in Commercial Operation since June 2011.


Tariff

The Company's core earnings come from a generation tariff paid by NTDC. The tariff comprises a capacity charge (for availability) and an energy charge (for power supplied). For Q4 2025, the energy charge is PKR 2.4920/kWh (gas) and PKR 2.5564/kWh (HSD).


Return on Project

The dollar IRR of Halmore Power, as agreed with NEPRA, is 12%


Ownership
Ownership Structure

Halmore Power is effectively a wholly owned entity, with 99.99% of its shareholding held by Mian Karim Ud Din. The ownership was transferred to him as part of the inheritance following the passing of the company's founder, Mian Muhammad Shairf, in September 2017.


Stability

Halmore Group is a diversified business conglomerate, primarily backed by a consortium of UK-based investors. The group's core focus is the UK real estate sector, with a portfolio that includes prime development projects in Central London.


Business Acumen

The sponsors possess over a decade of experience in the power sector and have a significant presence in UK real estate development. They are also actively exploring opportunities in diverse domestic sectors, including LNG, Oil & Gas, hotels, and infrastructure. Notable group companies under the Halmore umbrella include Oilco Petroleum (Pvt) Ltd, Energas Terminal (Pvt) Ltd, and Halmore Properties (Pvt) Ltd.


Financial Strength

The sponsors demonstrate considerable financial strength, derived from a diversified array of profitable enterprises. Their position as UK-based investors, with a claimed net worth in excess of US$600 million, indicates significant financial capacity, though this remains self-reported


Governance
Board Structure

The Board of Directors (BoD) consists of four members, including the Chief Executive Officer (CEO). All directors, except the CEO, are representatives of the sponsoring family. The board is chaired by Mian Karim Ud Din, a Chartered Accountant with over thirty years of professional experience.


Members’ Profile

Each member of the Board is professionally qualified and contributes diverse expertise to the Company’s governance. Directors representing the sponsoring family possess extensive experience in the construction and hospitality sectors. In contrast, the Chief Executive Officer, an Electrical Engineer, brings specialized experience in power sector project development, construction management, and operations and maintenance.


Board Effectiveness

The board’s combined expertise provides valuable oversight in shaping the company’s operational and financial strategies. Currently, the governance structure does not include specialized board committees. Oversight is exercised through quarterly board meetings, where operational and financial performance is reviewed.


Financial Transparency

The Company's statutory auditor is KPMG Taseer Hadi & Co. For the financial year ended 30 June 2025, KPMG issued an unqualified (clean) audit opinion on the financial statements.


Management
Organizational Structure

Halmore Power maintains a lean and efficient management structure. The Chief Executive Officer is supported by a compact team of qualified and experienced professionals, enabling focused oversight and agile decision-making.


Management Team

The senior management is led by CEO Mr. Mahmood Akbar, appointed in March 2024. With over 26 years of experience in power systems construction, operation, and maintenance, Mr. Akbar has been with HPGCL since 2006 and previously served as General Manager of Operations. He holds a Mechanical Engineering degree from UET and a Master's in Energy Engineering from Sweden’s Royal Institute of Technology. He is supported by CFO Mr. Abid Mehmood, a seasoned finance professional and Chartered Accountant (Finalist) with over 25 years of diversified experience across the manufacturing and real estate sectors. He has a proven track record in financial management, strategic planning, and corporate governance, and currently serves as the Group Chief Financial Officer of Halmore Group, where he leads the Group’s finance, treasury, and compliance functions.


Effectiveness

The management of Halmore Power primarily focuses on strategic, commercial, and financial oversight. The day-to-day operations and maintenance of the power plant are contracted to GE under a comprehensive Operations & Maintenance (O&M) agreement. To ensure effective oversight and maintain technical awareness, the Company's management conducts regular coordination meetings with GE personnel, enhancing their understanding of plant operations.


Control Environment

A functional Management Information System (MIS) is in place to track operations and coordinate with the O&M contractor.


Operational Risk
Power Purchase Agreement

Halmore Power's primary source of revenue is the sale of electricity to its power purchaser, the National Transmission & Despatch Company (NTDC). The Company is entitled to receive capacity payments provided it meets benchmark availability standards and is ready to dispatch electricity, regardless of whether NTDC issues a purchase order.


Operation and Maintenance

The company has entered into an Operation and Maintenance agreement with the consortium of General Electric International, Inc. and General Electric Energy Parts, Inc. on April 27, 2008. The term of the O&M agreement isextended till June 2041


Resource Risk

Halmore Power has secured long-term fuel supply arrangements through a 30-year Gas Supply Agreement (GSA) with SNGPL and a 30-year Fuel Supply Agreement (FSA) for High-Speed Diesel (HSD) with PSO. The Company also procures HSD from other Oil Marketing Companies (OMCs). The inclusion of RLNG into the system has enhanced gas availability. In FY22 and FY23, the plant operated predominantly on gas/RLNG (99%), with the remaining operations on HSD (1%).


Insurance Cover

Halmore Power maintains comprehensive insurance coverage, including property damage insurance of PKR 40.2 billion and business interruption insurance of PKR 5.2 billion.


Performance Risk
Industry Dynamics

The country’s actual power generation in FY25 remained largely flat at ~127,160GWh. Recent data reveals significant shifts in the generation mix, with RLNG-based power declining 11% YoY to 1,815 GWh in September 2025, yet critically exceeding its reference target by 12.9%. This improved dispatch position occurred despite a 5.3% overall generation shortfall relative to the reference level, creating a 708 GWh surplus. The resulting lower system fuel cost triggered a negative Fuel Cost Adjustment (FCA) of PKR 0.37/kWh, compressing per-unit revenues for thermal generators. For RLNG-based power producers, operating within this landscape is defined by competing effectively in the merit order amid shifting global fuel prices, while navigating the financial pressure of negative FCAs and the persistent challenge of sector-wide underutilization.


Generation

Electricity generation during FY25 is 364GW (FY24: 207 GW, FY23: 287 GW, FY22: 676GW) due to an increase in demand as raisedby the power purchaser. Going forward, electric generation is expected to rise in the summer season.


Performance Benchmark

Under its Power Purchase Agreement (PPA), Halmore Power is required to maintain a plant availability of 88%. The Company's average availability during the period remained in line with this contractual benchmark. Net income for FY25 stood at PKR 2,725 million, compared to PKR 2,860 million in FY24, PKR 3,277 million in FY23, and PKR 6,184 million in FY22. The year-on-year decline in profitability is primarily attributable to an increase in the Cost of Goods Sold (COGS).


Financial Risk
Financing Structure Analysis

The Halmore Power project was initially financed under a capital structure comprising 25% equity (PKR 4,894 million) and 75% debt (PKR 14,683 million). The total project cost, including overruns, amounted to PKR 22,750 million. The Company has fully repaid all project-related debt, with the final settlement completed in FY21.


Liquidity Profile

As of FY25, the Company's total trade receivables stood at PKR 8,946 million (FY24: PKR 8,405 million; FY23: PKR 9,643 million; FY22: PKR 8,756 million). The persistent issue of circular debt within the power sector continues to constrain liquidity for Independent Power Producers (IPPs), necessitating reliance on short-term borrowings to meet working capital and operational requirements.


Working Capital Financing

A declining trend is observed in Halmore Power’s net working capital days, which stood at 172 days in FY25 (FY24: 224 days; FY23: 208 days; FY22: 155 days). This reduction is primarily attributed to a decrease in trade payable days. A similar trend is reflected in the Company's liquidity metrics, which have also shown improvement over the period.


Cash Flow Analysis

Free Cash Flow from Operations (FCFO) has decreased, standing at PKR 4,352 million in FY25 compared to PKR 4,671 million in FY24. Despite this decline, the Company’s coverage ratios have remained healthy. The financial risk is considered moderate, as capacity payments from the power purchaser provide stable cash flow to meet the Company’s debt obligations.


Capitalization

Initial project cost overruns were funded through sponsor loans, which were fully settled by June 2025. In 2018, the loan terms were revised to be interest-free and repayable at the Company’s discretion, leading to its reclassification as equity under ICAP’s technical guidance. This treatment has positively influenced the capital structure, with leverage declining to 22.2% in FY25 from 42.2% in FY22.
 
 

Mar-26

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Halmore Power Generation Company Limited


Financial Summary

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(PKR mln)


 Jun-25
12M		 Dec-24
6M		 Jun-24
12M		 Jun-23
12M
A. BALANCE SHEET
1. Non-Current Assets 15,907 16,296 16,716 16,137
2. Investments 0 0 2,901 3,520
3. Related Party Exposure 0 0 0 0
4. Current Assets 16,409 14,213 15,937 16,412
a. Inventories 494 494 494 494
b. Trade Receivables 8,946 10,924 8,405 9,643
5. Total Assets 32,315 30,509 35,554 36,069
6. Current Liabilities 2,725 1,925 2,331 3,445
a. Trade Payables 987 335 848 1,892
7. Borrowings 6,545 7,185 9,419 9,566
8. Related Party Exposure 0 0 0 0
9. Non-Current Liabilities 60 0 42 14
10. Net Assets 22,985 21,399 23,762 23,045
11. Shareholders' Equity 22,985 21,399 23,763 23,045
B. INCOME STATEMENT
1. Sales 17,501 8,585 13,255 13,925
a. Cost of Good Sold (13,671) (7,157) (9,010) (10,836)
2. Gross Profit 3,830 1,428 4,245 3,089
a. Operating Expenses (313) (151) (310) (293)
3. Operating Profit 3,517 1,277 3,935 2,796
a. Non Operating Income or (Expense) 15 205 (122) 1,264
4. Profit or (Loss) before Interest and Tax 3,532 1,482 3,813 4,060
a. Total Finance Cost (1,030) (566) (938) (761)
b. Taxation (2) 0 (15) (22)
6. Net Income Or (Loss) 2,499 915 2,860 3,277
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 4,352 1,329 4,671 5,131
b. Net Cash from Operating Activities before Working Capital Changes 3,323 1,329 3,666 4,323
c. Changes in Working Capital (921) (5,343) (168) (283)
1. Net Cash provided by Operating Activities 2,401 (4,014) 3,498 4,039
2. Net Cash (Used in) or Available From Investing Activities 2,890 (1) (729) (703)
3. Net Cash (Used in) or Available From Financing Activities (3,279) (3,279) (2,118) (1,575)
4. Net Cash generated or (Used) during the period 2,012 (7,294) 651 1,762
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 32.0% 29.5% -4.8% -45.6%
b. Gross Profit Margin 21.9% 16.6% 32.0% 22.2%
c. Net Profit Margin 14.3% 10.7% 21.6% 23.5%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 19.6% -46.8% 34.0% 34.8%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 10.4% 7.9% 11.9% 14.5%
2. Working Capital Management
a. Gross Working Capital (Average Days) 191 216 262 254
b. Net Working Capital (Average Days) 172 203 224 208
c. Current Ratio (Current Assets / Current Liabilities) 6.0 7.4 6.8 4.8
3. Coverages
a. EBITDA / Finance Cost 4.2 2.4 5.0 6.8
b. FCFO / Finance Cost+CMLTB+Excess STB 4.2 2.3 5.0 6.7
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.0 0.0 0.0 0.0
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 22.2% 25.1% 28.4% 29.3%
b. Interest or Markup Payable (Days) 355.0 356.8 389.2 511.8
c. Entity Average Borrowing Rate 13.3% 13.1% 9.7% 7.2%

Mar-26

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Halmore Power Generation Company Limited


Rating Scale

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Mar-26

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Halmore Power Generation Company Limited


regulatory disclosure

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