EPQL – earnings up in 9MCY23

Engro Powergen Qadirpur (PSX: EPQL) announced its financial performance for the nine months of 2023 recently with a sharp rise in earnings for the period.

A key factor for the rise in profits for 9MCY23 was the growth witnessed in revenue. EPQL’s revenues increased by 44 percent year-on-year, and the power company’s earnings were seen rising by over 77 percent year-on-year. The increase in sales revenue is attributable to higher dispatch as well as higher Period Weighing Factor (PWF) applicable on capacity payments. As a result, gross profit for the period was also higher by 72 percent year-on-year despite the growth seen in cost of sales. And the company’s gross margins went up from 20 percent in 9MCY22 to 24 percent in 9MCY23.

The operating margin and net margin also witnessed uptick as EPQL’s expenses grew moderately during the period. Administrative expenses increased by around 20 percent year-on-year, while other expenses dipped by eight percent year-on-year during the 9-month period. There was a decline in other income by 20 percent year-on-year. However, this was more than offset by a rise of 27 percent year-on-year in finance income. As a result, the net margins were up from 18 percent to 22.4 percent in 9MCY23.

The power demand in the country continues to decline due to the current macroeconomic challenges including inflation, power prices hikes and lower economic growth. However, the company expects to continue to receive dispatch from the power purchaser as it generates cheaper electricity in comparison to its peers. Along with the 9MCY23 results, the Board of Directors of EPQL announced an interim cash dividend at Rs2 per share in addition to the interim cash dividend already paid at Rs1.50 per share.