KARACHI: Nishat Chunian Power (NCPL) has reported profit of Rs3.4 billion for the fiscal year 2018, which is 13.5% higher as compared to Rs2.99 billion the company reported last year. The increase comes on the back of improved revenue, which increased slightly by 2.7% from Rs16.15 billion in fiscal year 2017 to Rs16.6 billion in fiscal year 2018.
Earnings per share was Rs9.27 as compared to Rs8.17 last year. Gross profit increased by 7.4% to Rs4.6 billion from Rs4.3 billion, while the company also announced a final cash dividend of Rs1.5.
According to research analyst Noor Us Subah Hassan, who works at Optimus Capital Management, EPS has been slightly lower than her expectation of Rs9.38.
Hassan said that electricity generation during the year dipped 16% to 1,105 gigawatt hours (GWh).
“But growth of 27% in furnace oil price and rupee devaluation against dollar helped bolster top-line (revenue) for the company,” Hassan told The Express Tribune.
“Revenues are based on generation tariffs of (independent power producers) IPPs. These tariffs in turn have two components – capacity payments and energy purchase price. When furnace oil prices go up, energy purchase price revenue, that the company gets from the government for the electricity supplied, goes up too. Hence revenues of the company increase,” she explained.
“Induction of coal-based and (re-gasified liquefied natural gas) RLNG power plants have pushed FO-based (furnace oil based) generation lower this year, leading to year-on-year declines in generation,” she added.
The decline in demand for furnace-oil-based electricity expected in fiscal year 2019 would likely pressure earnings further in quarters ahead.
Published in The Express Tribune, October 2nd, 2018.