April 30, 2021 (MLN): Nishat Chunian Power Limited (NCPL) has witnessed a decline of 39.3% YoY in net profits to Rs2.06billion during 9MFY21, compared to the profits of Rs3.4bn in the corresponding period last year.
This translated into the earnings per share of the company which clocked in at Rs5.62/sh against Rs9.26/sh during 9MFY20.
The decline in profitability was attributable to lower topline earnings compared to the same period last year. The revenues of the company dropped by 20.73% YoY owing to removal of the debt component from the tariff and lower Furnace Oil (FO) prices. On the other hand, Interest on delay payments of invoices by the Power Purchaser contributed 35% to the net profit during the current period.
Gross margins dropped to 34% during 9MFY21 as compared to 48% in the corresponding period last year largely due to the absence of debt component in sales and higher load factor.
Furthermore, the company observed a decline in other income by 6.76% YoY, however, this was counterbalanced by a reduction in administrative expenses by 10.63% YoY.
On the financial front, 56% decline was observed in terms of finance costs which stood at Rs722million during the period as compared to Rs1.64bn in the corresponding period last year on account of a decline in mark-up cost amid a substantial dip in interest rates and decrease in short term borrowings.
During the period under review, the company did not pay any taxes neither any dividend was announced by the Board of the company.
With regards to circular debt which has always been a major issue for companies operating in the power sector, the company’s quarterly report highlighted that liquidity management remained challenging during the period. As of March 31, 2021, the total receivables from Power Purchaser have amplified to PKR 20.56 billion, out of which PKR 16.53 billion were overdue. In order to resolve the issue of overdue receivable the Company and CPPA-G have agreed a payment mechanism in Master Agreement whereby the total overdue receivables as on November 30, 2020 will be paid to company in two instalments as agreed in the Master Agreement. National Electric Power Regulatory Authority ('NEPRA') has issued its determination on revision in tariff as required by the Master Agreement paving the way for the payment of first installment, however its execution is pending at the GOP end.
|
Profit and Loss Statement for the nine months ended March 31, 2021 ('000 Rupees) |
|||
|---|---|---|---|
|
Mar-21 |
Mar-20 |
% Change |
|
|
Sales |
8,393,602 |
10,588,940 |
-20.73% |
|
Cost of Sales |
(5,537,806) |
(5,461,792) |
1.39% |
|
Gross Profit |
2,855,796 |
5,127,148 |
-44.30% |
|
Administrative expenses |
(98,194) |
(109,874) |
-10.63% |
|
Other operating expenses |
– |
(825) |
|
|
Other income |
27,520 |
29,516 |
-6.76% |
|
Profit from operations |
2,785,122 |
5,045,965 |
|
|
Finance cost |
(722,049) |
(1,644,029) |
-56.08% |
|
Profit before taxation |
2,063,073 |
3,401,936 |
-39.36% |
|
Taxation |
– |
– |
– |
|
Profit for the year |
2,063,073 |
3,401,936 |
-39.36% |
|
Earnings per share – basic and diluted (Rupees) |
5.62 |
9.26 |
-39.31% |
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