KARACHI: Nishat Chunian Power Limited’s profit soared 74% to Rs1.3 billion during the quarter ended March 31, 2020 mainly due to depreciation of rupee against the US dollar.
The company had reported a profit of Rs751.3 million in the same period last year, according to a notice sent by the company to the Pakistan Stock Exchange on Wednesday.
Accordingly, the earnings per share of the company increased from Rs2.05 last year to Rs3.55 in the quarter under review. “The increase in profit came mainly on the back of rupee depreciation against the US dollar which enhanced return on equity for the firm,” said Arif Habib Limited Deputy Head of Research Tahir Abbas. “On the other hand, closure of a plant also lent support as the fixed cost of the company fell.”
The net sales of the company registered a decline of 1% to Rs2.81 billion compared to Rs2.84 billion in the same quarter last year. The decline in sales was led by lower dispatches.
“The load factor of furnace oil based plants remained very low amid lower demand of electricity and availability of relatively cheaper sources of power generation (coal and hydel),” an AHL report added.
Nishat Chunain’s gross profit increased from Rs1.28 billion during the corresponding quarter of the previous year to Rs1.84 billion during the quarter under review.
Gross margins of the company increased by 20 percentage points to 66% year-on-year due to 10.5% rupee depreciation along with lower load factor, stated the report.
Administrative expenses of the company almost halved to Rs33.7 million during the quarter compared to Rs65.4 million in the same period last year.
Finance cost of the company rose from Rs372 million in the same quarter last year to Rs510 million during the quarter under review, an increase of 37%.
“Finance costs went up due to higher short-term borrowings (up by 37% year-on-year to Rs12.3 billion as of December 2019) along with higher interest rates,” said the report.
During the day, Nishat Chunian’s share price rose Rs0.03 to close at Rs13.2 with 424,500 shares exchanging hands.
During the nine month period ended March 31, 2020, the company’s profit rose 31% to Rs3.4 billion. The company had reported a profit of Rs2.61 billion in the same period of the previous fiscal year.
Earnings per share of the company rose from Rs7.09 last year to Rs9.26 during the period under review.
Published in The Express Tribune, April 30th, 2020.
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