Nishat Power Limited (NPL), part of the Nishat Group, posted its 9MFY17 result yesterday which saw the company’s bottom line under stress. Starting from its top line, NPL saw a 5 percent reduction in sales due to slightly lower despatches as compared to the previous year.
Even though NPL’s 3QFY17 gross profit saw an increase of 15 percent as compared to the previous period, yet the 9MFY17 figure registered a proportionate decrease. The reason behind the good quarterly performance can be attributed to improved fuel savings on the back of increased electricity despatches.
However, this trend was observed in the opposite direction for the 9MFY17 period with NPL’s fuel savings for the period faring less well in the face of rising furnace oil prices but a lower despatch level as compared to 9MFY16.
Recall that the profitability of Pakgen Power Limited (PKGP, also part of the Mansha Group), has also dipped for its recently announced FY16 result on the account of increased delta loss due to lower fuel savings. The company’s gross profit margin went down from over 30 percent last year to less than 10 percent in FY16. However, in the case of Pakgen plant closure also had a big impact on the company’s performance.
The reduction in other income and the increase in administrative expenses led NPL to register a 16 percent decrease in its net profit on a year-on-year basis. The company saw its EPS for 9MFY17 dip Rs6.06 from Rs7.22 in the previous period. Investor sentiment has been cautious since the past two months and NPL has seen low trading volumes on the back of consistently underperforming the benchmark KSE-100 index over the past year.
NPL has not declared any dividend for 3QFY17 making its total dividend payout till date at Rs2 per share. Like the majority of IPPs, NPL is also the unwilling victim of rising circular debt.
The company noted in its previous report that total receivables from NTDCL on December 2016 were Rs7.5 billion out which Rs6.2 billion were overdue. This might be the reason that the company surprised investors by making no dividend announcement for the quarter.
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