Nishat Power’s profits fall due to absence of debt portion in capacity payments

April 21, 2021 (MLN): Nishat Power Limited (NPL) has reported consolidated net profits of Rs 2.12 billion (EPS: Rs 6) during 9MFY21 ended March 31, 2021, depicting a decline of around 44% YoY against net profits of Rs 3.78 billion (EPS: Rs 10.69) in the same period of last year.

The profitability of the company went down primarily due to the absence of debt servicing charges in capacity payments.

During the said period, the company’s revenue went down by 17% YoY to Rs 7.88 billion on the back of the absence of debt portion and lower FO prices, Arif Habib research cited. This significant decline in topline shrank the gross margin from 53% to 33% along with a hike in the cost of sales.

On the cost side, the administrative cost dropped by 13% YoY to stand at Rs 216 million.

However, the positive highlight is an upsurge in other income that increased by around 9x YoY to peg at Rs 41.80 million during 9MFY21.

Meanwhile, a massive decline of 72% YoY in finance cost provided much-needed respite to the bottom line due to lower short-term borrowings as well as the lower interest rates.

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