Operational loss? KAPCO turns Rs827m profit anyway!

February 27, 2026 (MLN): Kot Addu Power Company Limited (PSX: KAPCO) has reported a profit after tax of Rs826.8 million for the six months ended December 31, 2025, down 57.5% from Rs1.94 billion in the same period last year.

Earnings per share fell to Rs0.94 from Rs2.21, reflecting the contraction in profitability.

The company also announced Rs1.5 per share dividend. 

KAPCO reported a top-line revenue of Rs4.27 billion contrast to the zero-revenue period last year when the plant was under preservation.

However, this restart came with a "price tag" as the company posted a gross loss of Rs554 million, showing that the initial costs of firing up operations and maintaining the contract currently outweigh the direct income from power sales, leading to a negative gross margin of 12.97%.

Administrative and other operating expenses remained largely stable at Rs395.1 million and Rs99.9 million, respectively, while plant maintenance costs were nil, compared to Rs1.46 billion in the previous period.

The company was saved from an overall loss by its substantial Other Income, which contributed Rs2.67 billion to the books. Although this figure is 42% lower than the previous year, it remains the primary engine keeping the company’s operating profit in positive territory. 

A significant positive for the company is the 95.2% reduction in finance costs, which plummeted from PKR 233.5 million to just PKR 11.3 million.

This indicates a massive deleveraging or a significant reduction in the interest burden on the company’s working capital.

The "tax bite" was particularly painful this period, increasing by 177.5% to Rs783.7 million. This high tax expense, despite lower overall profits, further dragged down the bottom line, leading to a 57.5% decline in net profit and EPS.

The net margin stood at 19.37%, underlining the reliance on non-operating income to deliver profitability.

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