Kapco likely to post Rs6.1b profit after tax

RECORDER REPORT

KARACHI: Kot Addu Power Company (Kapco) is expected to post profit after tax (PAT) of Rs 6.1 billion, translating into earning per share (EPS) of Rs 6.95 in FY12, showcasing a decline of 6 per cent on year-on-year basis, analysts said.

Similarly, in the fourth quarter of FY12 the company is expected to post a profit of Rs 1.76 billion with EPS of Rs 2.0, up by nominal 6 percent on quarter-on-quarter basis as compared to the previous quarter, they added.

KAPCO is scheduled to announce its FY12 results on (Saturday) August 28. “Despite 10 per cent on quarter-on-quarter basis increase in power generation, 30 per cent leap in the financial charges kept the profitability of the company under check during the fourth quarter of FY12”, Abdul Azeem, an analyst at InvestCap said.

“We expect the company to announce final cash dividend of Rs 2.75/share as well, taking the total payout for the year to Rs 6.50/share”, he added.

He said that the company’s financial charges are expected to bump up by 23 per cent year-on-year basis to Rs 10.7 billion during FY12, as the company’s receivables from Wapda are forcing the company to rely heavily on borrowing from the financial institutions.

With the announcement from the government to issue TFCs worth Rs 140 billion to curtail circular debt, the company has received Rs 35 billion. “Thus it is expected to provide much needed relief to the company as we expect a sound reduction in the borrowed funds, which in effect is expected to lower the company’s financial charges going forward thus bolstering its cash flows”, he said.

Moreover, decline of 5 per cent to Rs 7.9 billion under the other income head coupled with high financial charges is expected to have further negative impact on the profitability of the company.