Nishat Power’s profit grows 58% in first half of fiscal 2013

Power company announces Re1 per share interim dividend with the earnings.

KARACHI:

Nishat Power (NPL) – a subsidiary of Nishat Mills which holds a 51% stake in the power company – reported a profit of Rs1.337 billion for the first half of financial year 2012-13, up 58% from a profit of Rs0.849 billion in the corresponding half of the preceding year.

According to a copy of the results sent to the Karachi Stock Exchange (KSE), the power company announced an interim dividend of Re1 per share with the earnings.

“We believe better operational levels, increased demand from the government and favourable indexation movements led to the growth in profitability,” said Zoya Ahmed, analyst at BMA Capital.

Sales recorded a growth of 20% to Rs12.62 billion in the semi-annual period compared to Rs10.48 billion in the corresponding half, driven by higher utilisation of the power plant at 81%.

NPL’s savings from operation and maintenance and gains from fuel efficiency were two significant factors, which contributed to improved performance in an industry hurt by circular debt.



After witnessing a considerable decline in plant utilisation over the past one year owing to liquidity crunch, the load factor hit 81% on account of payments of overdue receivables by the National Transmission and Dispatch Company.

The regular payments from the NTDC also resulted in a 19% drop in finance cost. Furthermore, regular payments resulted in improvement in load factor leading to higher operation and maintenance savings.

Moreover, higher utilisation levels of NPL shows the government’s commitment to keep load-shedding at a minimum, which analysts do not believe can be sustained due to tariff difference standing at Rs3.17 per kilowatt hour and subsidy of Rs185 billion spent in the first six months of fiscal 2013, said Arif Shaikh, analyst at Global Securities.

According to Arif Habib research, NPL managed to save a hefty Rs0.136 billion due to its fuel efficiency level of 46.3%, a healthy support for the bottom-line.

Published in The Express Tribune, February 19^th, 2013.

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