By: Fortune Securities Limited
Nishat Chunian Power Limited (NCPL)’s BoD is scheduled to approve 1HFY15 result on 24th February’15. We anticipate the company’s 2QFY15 earnings to clock in at PKR 851mn (EPS: PKR 2.32) against PKR 693mn (EPS: PKR 1.89), up by 23% YoY. Cumulatively, this takes 1HFY15 net profit to PKR 1.56bn (EPS: PKR 4.25), up 30% YoY. Along with the result, we expect a cash payout of PKR 1.5/Share taking cumulative payout to PKR 3/share in 1HFY15.
We estimate revenues to witness YoY decline of 5% mainly on the back of nominal decline in load factor of 85% during the quarter against the load factor of 86% in 2QFY14 and decline in indexation factor as PKR/USD rate set by NEPRA was 102.7 against 105.5 in 2QFY14. Moreover, fuel savings are estimated to increase to PKR 197mn (EPS impact: PKR 0.54). Net benefit on circular debt exposure shall likely decrease to PKR 70mn (EPS impact: PKR 0.19) mainly on the back of increase in short term borrowings.
It is pertinent to mention here that the plant is operating above benchmark efficiency level of 45%; therefore the decline in oil prices will also decrease fuel savings going forward.