Kot Addu Power Company Limited (KAPCO) announced its 3QFY23 financial result today where the company posted a profit after tax (PAT) of PKR 689mn (EPS: PKR 0.78), down by 74% YoY compared to PKR 2,620mn (EPS: PKR 2.98) during same period last year. This took the 9MFY23 earnings to PKR 3,875mn (EPS: PKR 4.40), down by 53% YoY. The decline in earnings is owed to the completion of PPA on Oct 24th, 2022 with the plant been out of operations since then. However, NEPRA has renewed the company’s generation license till Sep 24th 2024. The company has also submitted an application for a reference generation tariff and is waiting for a positive response from the regulator.

Result Highlights

· During 3QFY23, net sales of the company dipped to PKR 128mn. The decline in sales was witnessed given the completion of PPA on Oct 24th, 2022 with the plant been inoperative since then.

· Other income increased by 51% YoY to PKR 3.9bn during 3QFY23 on the back of higher interest rates, however overdue receivables and investments witnessed a decline.

· Other expense during 3QFY23 increased to PKR 477mn compared to PKR 0.25mn during same period last year. The rise in other expense was due to marked to market losses on PIBs and SUKUKs.

· During 3QFY23, finance cost also increased by 47% YoY due to higher interest rates.

Courtesy – AHL Research