October 19, 2020 (MLN): Engro Powergen Qadirpur Limited (EPQL) has posted 22.2% YoY decline in net profits during 9MCY20 to Rs 2 million from Rs 2.6 million in 9MCY19.
The earnings per share of the company also went down by the same percent from Rs 8.06 per share to Rs 627 per share.
According to the report by Taurus Securities, the decline in income is attributed to the completion of debt servicing period, due to which company’s capacity payments have significantly decreased, this has a major impact on EPQL’s profitability.
Moreover, revenues also declined significantly by 35.7% YoY to Rs 6.9 million due to lower load factor during the period. Going forward, load factor is expected to remain low due to the lower position of EPQL on the merit order.
To highlight, due to the depletion of the gas field, EPQL shifted towards GAS/HSD mix of 70/30, which increased the cost of power generation from EPQL’s plant, hence, lower ranking in merit order. However, the GIDC waiver for 24 months will have a positive impact on its merit order ranking, going forward.
Furthermore, the company also booked a finance income of Rs 242,751 against the finance cost of Rs 68,287 in the same period last year, which provided a comfort to EPQL’s profitability.
With regards to company’s profitability in near term, the report stated that the it will remain lower for EPQL. However, it will not impact the cash flow of the company, hence, no impact on payout capacity, it added.
Profit and Loss Account for the Nine months ended September 30, 2020 (Rupees) | |||
|---|---|---|---|
| Sep-20 | Sep-19 | % Change |
Sales | 6,962,848 | 10,835,384 | -35.74% |
Cost of Sales | (5,122,052) | (8,047,392) | -36.35% |
Gross Profit | 1,840,796 | 2,787,992 | -33.97% |
Administrative Expenses | (72,625) | (69,480) | 4.53% |
Other Expenses | (44,858) | (91,003) | -50.71% |
Other Income | 79,623 | 53,721 | 48.22% |
Profit from Operations | 1,802,936 | 2,681,230 | -32.76% |
Finance Income / (Cost) | 242,751 | (68,287) | – |
Workers' profits participation fund and Workers' welfare fund | – | – |
|
Profit before Taxation | 2,045,687 | 2,612,943 | -21.71% |
Taxation | (14,417) | (2,662) | 441.59% |
Profit for the Period | 2,031,270 | 2,610,281 | -22.18% |
Earnings per share – Basic and Diluted | 6.27 | 8.06 | -22.21% |
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