Kot Addu Power Company Limited (KAPCO) announced its 4QFY23 financial result today where the company posted a profit after tax (PAT) of PKR 84mn (EPS: PKR 0.10), down by 95% YoY compared to PKR 1,666mn (EPS: PKR 1.89) during same period last year. This took the FY23 earnings to PKR 3,959mn (EPS: PKR 4.50), down by 60% YoY. The decrease in earnings can be attributed to the plant’s non-operational status since the conclusion of the PPA on Oct’24th, 2022. However, to highlight, NEPRA has approved a provisional tariff effective from Aug’23. Along with the result, the company has also announced a cash dividend of PKR 5.0/share taking full year payout to PKR 8.5/share.

Result Highlights

· During 4QFY23, net sales of the company dipped to PKR 137mn. This decline in sales was primarily attributed to the plant’s inoperative status following the conclusion of the PPA, as previously mentioned. During FY23, sales also decreased by 81% for the same aforementioned reason.

· Other income increased by 21% YoY to PKR 4.3bn during 4QFY23. This growth in other income can be attributed to high interest rates, despite a decrease in overdue receivables.

· Other expenses during 4QFY23 increased to PKR 614mn compared to PKR 149mn during same period last year. The rise in other expense was due to revaluation losses on PIBs and SUKUKs, we view.

· During 4QFY23, the finance cost decreased by 8% YoY, despite higher interest rates compared to same period last year, mainly due to lower levels of short-term borrowings.

· Effective taxation during 4QFY23 remained 91% compared to 34% during 3QFY23. The rise in effective tax rate is due to super tax.

Courtesy – AHL Research