Pakgen Power Limited (PKGP) announced its FY16 result yesterday which saw the companys bottomline dip by 68 percent on a year-on-year basis. This was in stark contrast to revenues which grew at 146 percent as compared to FY15 because of higher power dispatches. However it should be noted that this was due to the PKGP plant being shut for most of 2015 due to transformer failure which resulted in a dispatch level of only 8 percent.
As can be evidenced from the above graph the stock price of Pakgen peaked upto Rs35 per share by the start of 2015 but soon fell due to the depressed trading volumes. This was caused by negative investor sentiment due to the closure of the power plant. The profitability of the company has decreased with the gross profit margin going from over 30 percent last year to less than 10 percent in FY16. This highlights increased inefficiency possibly due to lower fuel savings and increased delta loss with the rise in dispatches
The company has declared a final cash dividend of Rs1 per share bringing the total payout for 216 to Rs2 per share. The earnings of the company recorded a decrease of 68 percent with the EPS for the year clocking in at Rs1.39 for the year. PKGP is currently undertaking coal conversion of its plant which will most likely allow it to bring increased efficiency and fuel savings. Therefore with the resumption of plant operations, coal conversion as well the plan to make an R-LNG power plant in the future, PKGP could see better prospects ahead.
Copyright Business Recorder, 2017
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