Kot Addu Power Company Limited (KAPCO) announced its 2QFY23 financial result today where the company posted a profit after tax (PAT) of PKR 1,076mn (EPS: PKR 1.22), down by 68% YoY compared to PKR 3,328mn (EPS: PKR 3.78) during same period last year. This took the 1HFY23 earnings to PKR 3,186mn (EPS: PKR 3.62), down by 43% YoY. The decline in earnings is owed to the completion of PPA on Oct 24th, 2022 and the plant has 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. The company has also announced a cash dividend of PKR 3.50/share along with the result.

Result Highlights

· During 2QFY23, net sales of the company dipped by 88% YoY I 90% QoQ due to lower dispatches, which declined by 95% YoY | 93% QoQ to 36 GWh. The decline in dispatches was witnessed given the completion of PPA on Oct 24th, 2022 and the plant has been out of operations since then.

· Other income increased by 1% YoY to PKR 3.9bn during 2QFY23 on the back of higher interest rates, however overdue receivables witnessed a decline.

· During 2QFY23, finance cost increased by 49% YoY due to higher interest rates.

· Effective tax rate during 2QFY23 settled at 38% compared to 26% during 2QFY22, given the imposition of a super tax through Finance Act, 2022.

Courtesy- AHL Research