Nishat Chunian Power earnings registered a decline of 55% YoY

Nishat Chunian Power Limited (NCPL) announced its 2QFY21 financial result today where the company posted a profit after tax (PAT) of PKR 466mn (EPS: PKR 1.27), down by 55% YoY compared to PKR 1,030mn (EPS: PKR 2.80) same period last year. This takes 1HFY21 profit after tax to PKR 1,425mn (EPS: PKR 3.88), down by 32% compared to profit after tax of PKR 2,098mn (EPS: PKR 5.71) during 1HFY20.

Result Highlights

During 2QFY21, net sales witnessed a decline of 41% YoY to clock in at PKR 1,380mn. The decline in sales is attributable to lower FO prices (-13% YoY) along with absence of debt portion in sales. Load factor of the company settled at 6% compared with 0.1% during 2QFY20.

During 2QFY21, gross margins of the company decreased by 16pps YoY to 54%. The decline in margins is mainly due to absence of debt portion in sales and higher load factor. That said, 6% YoY PKR depreciation had been witnessed during 2QFY21.

Finance costs decreased by 59% YoY to PKR 241mn. The decline in finance costs is due to lower short-term borrowings (down by 17% YoY to 10.3bn as of Sep’20) along with lower interest rates.

Currently we have BUY call on the scrip with a Dec’21 target price of PKR 25.2/share.

Courtesy – AHL Research

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