KAPCO: Key Takeaways from FY19

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Zubair Yaqoob

Karachi

Kot Addu Power Company Ltd. (KAPCO) held an analyst briefing Tuesday to discuss its financial performance and future outlook. During FY19, KAPCO posted a profit after tax (PAT) of PKR 13.1bn (EPS: PKR 14.90), up by 23% YoY compared to PKR 10.6bn (EPS: PKR 12.06) during same period last year. While in 1QFY20, the company posted a profit after tax (PAT) of PKR 5.0bn (EPS: PKR 5.72), up by 84% YoY compared to PKR 2.7bn (EPS: PKR 3.11) during same period last year. During FY19, sales witnessed a decline of 8% YoY on the back of 33% decline in electricity dispatches.
Gross margins went up by 219pps to 16.7% in FY19. The rise in gross margins was witnessed due to 12% YoY rise in Capacity Purchase Price (CPP) to PKR 20.1bn during FY19 compared with PKR 18.0bn during FY18. Other income went up by 46% YoY to PKR 13.8bn due to rise in overdue receivables. Out of total receivables of PKR 132bn (as of Sep’19), PKR 43bn are capacity payment based. Finance costs also increased by 34% YoY to PKR 8.3bn in FY19 due to rise in short term borrowings to PKR 54bn and higher interest rates.
As per the management, transmission and distribution (T&D) losses are still major challenges for the power sector. On the circular debt front, the monthly addition in circular debt has come down to PKR 15-20bn from PKR 35-40bn earlier.

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