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Karachi Electric Narrows Loss After Price Increase

Oct. 21 (Bloomberg) -- Karachi Electric Supply Co., the supplier of power to Pakistan’s largest city, narrowed its first-quarter loss after higher prices increased revenue.

The utility’s loss in the three months ended Sept. 30 was 1.8 billion rupees ($21 million), or 0.09 rupee a share, compared with 5.6 billion rupees, or 0.43 rupee, a year earlier, Karachi Electric said in a statement to the stock exchange today. Revenue climbed to 22.94 billion rupees from 18.1 billion rupees.

“Power tariffs rose around 25 percent over last year and that supported the revenue increase,” said Muhammad Imran, head of research at Arif Habib Ltd. in Karachi. Prices may be increased by about 33 percent this financial year, helping the company to reduce losses, he said.

Demand for energy in Pakistan exceeds supply by three times and daily electricity outages have forced textile and engineering factories to close and caused riots across the country. Karachi Electric needs to add plants, replace decrepit cables and cut power theft to end blackouts that hit as much as 67 percent of the city’s population.

The utility’s shares, which have fallen 21 percent this year, rose 3.3 percent to 2.17 rupees as of 10:10 a.m. local time on the Karachi Stock Exchange.

The company’s loss in the year ended June 30 narrowed to 14.6 billion rupees from 15.5 billion rupees a year earlier.

To contact the reporter on this story: Farhan Sharif in Karachi at fsharif2@bloomberg.net.

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net.

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