KAPCO: Lower capacity payments dent profits

MG News | February 22, 2022 at 03:11 PM GMT+05:00

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February 22, 2022 (MLN): Kot Addu Power Company Limited (KAPCO) has announced its 1HFY22 financial result today wherein the company recorded a profit after tax of Rs5.61 billion (EPS: Rs6.37), showing a significant decline of 51% YoY as opposed to Rs11.50bn (EPS: Rs13.06) achieved in the same period last year.

This decline in profitability was mainly due to lower margins thanks to lower capacity payments.

During the first half of the ongoing fiscal year, the net sales of the company witnessed a 58% YoY jump to clock in at Rs53.7bn mainly due to higher dispatches along with higher FO prices. However, an increase in the cost of sales by more than twofold led the gross margins to plunge considerably to 5.83% YoY from 33.42% YoY.

On the cost front, the other expenses stood at Rs138mn while administrative expenses saw a notable decline of 57% YoY to Rs282mn during the said period.

Meanwhile, the company reported a marginal reduction of 3% YoY in finance cost to Rs1.58bn in 1HFY22 as the State Bank of Pakistan (SBP) hiked interest rates in the second quarter of the ongoing fiscal year amid growing inflation.

However, the tax expenses fell by 56% YoY to Rs2.08bn in 1HFY22, which provided some solace to the financial wellbeing of the company.

Profit and Loss Account for the half-year ended December 31st, 2021 ('000 Rupees)
	Dec-21	Dec-20	% Change
Sales	53,731,431	34,076,139	57.68%
Cost of sales	(50,601,160)	(22,685,678)	123.05%
Gross profit	3,130,271	11,390,461	-72.52%
Administrative expenses	(281,940)	(663,787)	-57.53%
Other expenses	(138,473)	-	-
Other income	6,555,859	7,099,471	-7.66%
Operating profit	9,265,717	17,826,145	-48.02%
Finance cost	(1,581,478)	(1,628,668)	-2.90%
Profit before tax	7,684,239	16,197,477	-52.56%
Taxation	(2,076,577)	(4,699,485)	-55.81%
Profit for the period	5,607,662	11,497,992	-51.23%
Earnings per share - basic and diluted (Rupees)	6.37	13.06	-51.23%