Kot Addu Power Company Limited (Kapco) reported on Friday that its net profit dropped 13% to Rs6.2 billion in nine months ended March 31, 2016 due to a decline in sales with the overhauling of turbines.
“The result was lower than consensus estimates on account of overhauling conducted on three turbines, which offset the impact of more efficient gas-based generation,” BMA Capital said in a post-result comment.
The power producer had earned Rs7.12 billion in the same period last year. Accordingly, earnings per share stood at Rs7.05 in the period under review compared to Rs8.09 in the corresponding period of previous year, Kapco said in a notification to the Pakistan Stock Exchange.
Sales revenue declined 36% to Rs47.93 billion as opposed to Rs74.73 billion last year.
“The decline in earnings is mainly due to likely higher operation and maintenance expenditure and 43% year-on-year lower other income (explained by lower penal mark-up income owing to improved recoveries),” Taurus Securities said.
The other income fell to Rs2.95 billion from Rs5.22 billion in the corresponding period last year.
The decline in profitability was partially offset by lower fuel losses (furnace oil prices dropped 44% on a year-on-year basis) and partially by 54% fall in finance cost on the back of decreasing debt levels and decades low interest rate, Taurus said.
BMA Capital added the lower finance cost was a factor behind improved liquidity of the company amid a decline in furnace oil prices and subsequent improvement in the circular debt position.
Published in The Express Tribune, April 23rd, 2016.
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