Kot Addu Power Company Limited (KAPCO) announced its half yearly financial results ended December 2015. During the period under review, the company earned Rs 4.33 billion (EPS: Rs 4.92) profit after tax, which resulted in 10% YoY decline as against Rs 4.83 billion (EPS: Rs 5.49) it achieved last year. The decrease in earnings was attributed to net effect of higher repair and maintenance expenses. The company’s management announced an interim cash dividend of Rs. 4.25/share.
Lower electricity generation: In 2QFY16, Kapco generated 1,416 Gigawatt hours (GWh) of electricity (1,953 GWh in 1QFY16) at a load factor of 47.8% with an overall commercial availability of 92.1%. The core reason behind lower output is ill-payment from WAPDA. Top line decline by 41% YoY to Rs 34.43 billion versus Rs 58.39 billion in 1HFY15 on account of lower load factor.
Repair cost further dents profitability: During half year tenure, the company’s cost of sales dropped by 45%YoY to Rs 28.1 billion, on the back of 58%YoY dip in fuel cost; furnace oil prices were declined by 46%YoY in 2QFY16. Nevertheless, the company’s gross profit was dipped by 15%YoY from Rs 7.45 billion in 1HFY15 to Rs 6.33 billion in 1HFY16. The decline incurred due to incremental repair and renewal cost during the second quarter to Rs 383 million, as compared to Rs 31 million during the same period last year.
By: Azee Securities (Pvt.) Ltd.