KAPCO’s profitability shrinks by 63%YoY in 1QFY22

October 20, 2021 (MLN): Kot Addu Power Company Limited (PSX: KAPCO) has witnessed a significant decline in its net profits by around 63.24% YoY to stand at Rs2.28billion (EPS: Rs2.59) during the fiscal year 2020-22, compared to Rs6.2bn (EPS: Rs7.05) recorded in the same period last year (SPLY).

According to the financial results sent to Exchange, the net sales of the company grew by 46.32% YoY to Rs34.24bn on the back of higher dispatches along with higher RLNG and FO prices. However, the cost of sales jumped more than the sales- by 87.17%. Resultantly, the gross profit of the company reduced by 77.58% YoY to Rs1.30bn.

On a sequential basis, net sales witnessed an increase of 627% QoQ due to a low base on the back of CPP adjustment of PKR 19.3bn during 4QFY21. To recall, the dispute of outstanding liquidity damages between the company and Central Power Purchasing Agency was resolved in the last quarter and as a result, the PPA of the company was extended for 485 days with effect from Jun 27, 2021, as per the report by Arif Habib Limited.

Going by the financial statement, lower other income (down by 32% YoY) during the said period due to lower levels of receivables as the Govt has paid 40% of outstanding receivables to the company back in Jun’21.

Meanwhile, the finance cost of the company went down by 18.23% YoY on the back of lower short-term borrowings, providing some cushion to the bottom line.

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