The top-line for Nishat Groupr’s IPP, Nishat Power Limited (PSX: NPL) had been fallings for the past two years due to a decrease in furnace oil prices amid low oil price environment. However, some recovery in the oil market, and hence the increase in furnace oil prices has led to a modest increase in NPL’s revenues in FY17. The company announced its annual result yesterday with sales inching up by over 8 percent, year-on-year. However, the earnings had lackluster growth in the same period.

NPL’s gross margins shrunk as well as the company saw higher cost of sales on account of a major overhaul in FY17 that led to increased O&M expenses and a dip in load factor. The estimated load factor for NPL in FY17 stood at 72 percent, down by 2 percent in FY16. However, it should be known that the power sector faces increased maintenance expenditure in the later years, which means that in the initial years’ profits, will be relatively higher.

Nshat Power Limited’s dividend payout has been sketchy amid the circular debt issue. The firm did not announce any dividend in 3QFY17 as the circular debt seemingly took a toll on NPL’s cash flows; however, it announced Rs2 per share along with its annual result for FY17.

Liquidity continues to be an issue for NPL. The company noted in its notes attached to the annual result for FY17 Rs816,033 million relating to capacity purchase price included in the trade debts, was not acknowledged by NTDC. However, the sole reason that they believe for the underutilization of plant capacity was non-availability of fuel owing to non-payment by NTDC.