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KAPCO: Lower other income hurts profitability

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April 23, 2021 (MLN): Kot Addu Power Company Limited (KAPCO) has earned net profits of Rs15.9billion during 9MFY21, down by 10.4% YoY compared to the profits of Rs17.77bn realized in the corresponding period a year ago.

This translated into earnings per share which went down by the same percent from Rs 20.19 per share to Rs 18.09 per share.

Going by the financial statement issued by the company, the primary reason behind the decline in profitability was a massive drop in Other income due to low-interest rates, as it plunged from Rs16.6bn to Rs9.3bn, down by 43.9% YoY.

During the period, the sales of the company clocked in at Rs45.6bn tumbled by 19.07% YoY. The reduction in sales may be due to lower dispatches along with lower prices of Furnace Oil (FO). However, the cost of sales of the company shrank by 28% YoY, resulted in an 8ppts YoY increase in gross margin from 28% to 36%.

With regards to major expense heads, the company encountered a 30% YoY rise in its administrative expenses, while finance cost dipped by 65.4% YoY on the back of lesser short-term borrowings and lower interest rates.

On the tax front, the company incurred a tax rate of 29% during the review period as opposed to 28% in SPLY.

 

Profit and Loss Account for the Nine months ended March 31, 2021 ('000 Rupees)

 

Mar-21

Mar-20

% Change

Sales

45,640,283

56,396,719

-19.07%

Cost of sales

 (29,267,078)

(40,720,742)

-28.13%

Gross profit

16,373,205

15,675,977

4.45%

Administrative expenses

 (872,639)

(670,340)

30.18%

Other income

9,335,102

16,658,928

-43.96%

Profit from operations

24,835,668

31,664,565

-21.57%

Finance cost

(2,399,343)

(6,937,448)

-65.41%

Profit before tax

22,436,325

24,727,117

-9.26%

Taxation

 (6,509,047)

(6,953,259)

-6.39%

Profit for the year

15,927,278

17,773,858

-10.39%

Earnings per share – basic and diluted (Rupees)

18.09

20.19

-10.40%

 

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Posted on: 2021-04-23T17:30:00+05:00

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