By: WE Financial Service Limited
We will discuss on the performance of the Power sector during 1QFY16 in our today’s morning briefing.
Minor decline in bottom-line: The cumulative profit after taxation (PAT) of four listed companies of the sector totaled Rs 5,952 million in 1QFY16 resulting in a minor drop of 1% YoY when compared to a PAT of Rs 6,006 million in 1QFY15. This decline was on back of; lower load factor, fall in other income, and higher administrative expenses. However, lower finance cost and decline in effective taxation provided support to the bottom-line. Our analysis consists of four listed companied of the sector which includes; The Hub Power Company Limited, Kot Addu Power Company Limited (KAPCO), Nishat Power Limited (NPL), and Nishat Chunian Power Limited (NCPL).
Significant drop in sales revenue: Due to decline in furnace oil prices and lower load factor, the sales revenue of the sector dropped 40.3% YoY in 1QFY16 to Rs 56,612 million as against Rs 94,846 million in the identical period in FY15. The cost of sales too remained lower during the period under review totaling Rs 47,615 million in 1QFY16 reducing by 43.9% YoY when compared to a cost of sales of Rs 84,835 million in 1QFY15. Therefore gross profit fell by 10.1% YoY in 1QFY16 to Rs 8,996 million as against Rs 10,011 million in similar period in FY15.