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Trading
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Trading during the year in review took place amid an extremely challenging environment. Demand
grew modestly, but new generating capacity added over the previous year by a new market
entrant and regulatory changes made in the regulation market continued to exert downward
pressure on the energy and ancillary markets.
Higher costs
The Company had to cope with volatile and rising cost of fuel. Fuel price was hovering
around US$300/MT in the beginning of the year and had surged past US$500/MT by year end.
Opportunities
Despite the difficult prevailing conditions, our prudent risk management strategy allowed us
to manage and ride out severe swings in both the electricity and fuel markets during the year.
New marketing programmes to retain our existing clientele and attract new customers were initiated
to ensure that our revenues were secured despite the challenges of oversupply in the electricity
market. We also adopted conservative hedging strategies for fuel in the light of the unprecedented
price movements. These strategies proved to be highly effective. In addition, our high plant
availability and reliability enabled us to maximise opportunities in the spot market.
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