Power Generation and Distribution Company: Kot Addu Power Company Limited Year Ended 30.06.2005
All stakeholders of the company have enriched after privatisation of the company. The company is supplying more power, saving foreign exchange, increasing consumers satisfaction and enhancing dividend for shareholders and above all playing a role model for other enterprises showing increased cordial relation with Wapda who in return are making payment on time.
Is it not wonderful in the backdrop of difficult relationship with Wapda in previous years by other entities of energy sector. Turnover of Kapco for the year under review was Rs 27.564 billion (2004: Rs 21.842 billion) showing impressive growth by 26.2% over previous year's. However, gross profit growth was only 13.7% because of rising cost of sales.
Turnover was higher due to increased load factor as a result of increased despatch by Wapda the load factor being 69.2% (2004: 48.3%). The company posted net profit at Rs 8.048 billion in the year under review as compared to Rs 6.936 billion booked in the previous year reflecting 16.0% increase. The company continues to discharge its liabilities as they become due. This was the year of further success for the company with number new technical records as mentioned in these columns.
The power plant of Kot Addu Power Company Limited (KAPCO) was built by Wapda in five phases between 1985 and 1996 in District Muzaffargarh, Punjab, 90 KM north west of Multan on the left bank of the River Indus at a distance of 16 km from Taunsa Barrage.
In April 1996 the company was incorporated as a public limited company and in June 27, 1996. And as a result of the privatisation initiative by the Government of Pakistan the management of the company was transferred to National Power (now International Power) of the UK who acquired 26% stake in the company through its subsidiary National Power (Kot Addu) Ltd (NPKAL). Later NPKAL bought further 10% shareholding, increasing its total to 36%. The other major shareholder is Wapda with a present shareholding of 46%.
Following the successful completion for sale through public offer by the Privatisation Commission (on behalf of Wapda), in February 2005, 18% of the company's stock is now held by the general public.
The company was formally listed on Karachi, Lahore and Islamabad Stock Exchanges on April 18, 2005.
The KAPCO shares are trading at a very high market price. During the last one year the market price of the share remained within the price band of Rs 34.70 and Rs 52.00 per share. On the last day of October 2005, the share's closing quotation was recorded at Rs 41.10 per share which is more than four times of the par value.
The company has very attractive profit distribution profile as it has not missed during the last four years dividend payouts at high rate. For the year ended June 2005, the directors of Kapco approved total dividend at Rs 8 per share (interim dividend Rs 3.50 per share plus Rs 4.50 per share as final dividend).
The principal activities of the company are to obtain, operate and maintain a multi-fuel fired power station with 15 generating units with a name plate capacity of 1,600 MW. It must be reckoned that the company is playing a pivotal role by giving sustained support to the energy sector.
Last year it supplied nearly 10% of the electricity requirements of the country which figures out to 33% of power generation supplied by the IPPs - Independent Power Producers.
It also provides fuel flexibility by being only one able to provide electrical energy using three different types of fuel, ie, natural gas, low sulphur furnace oil and high speed diesel.
The combined cycle technology of the power plant enables the company to ensure fuel cost efficiency and minimise wastage.
The power plant is the only major plant in Pakistan with the ability to self start in case of countrywide black out. It is the first company in Pakistan to be awarded three accreditation's simultaneously with the integrated management system (IMS). The company was awarded in July 2004, certificates of ISO-9001-2000 Quality Management, ISO 1400-1996 Environment Management and 18001-1999 Occupational Health and Safety Management (OHSAS).
Its engineering strategy developed along with the purchase of strategic spares ensures an acceptable risk profile that will deliver the required contractual plant availability.
The company also completed all the planned overhauls within the allocated outage periods.
The financial position of the company remained strong as evidenced from the liquidity, solvency ratios and break up value of the share as mentioned in the Performance Statistics below.
The operating efficiency made significant improvement as compared to previous year's relevant data. Net output increased to 8,135 GWh from 5,698 GWh. In the previous year. Thermal efficiency increased by 1.1 percentage points from 42.2% in the previous year to 43.3% in year under review. Load factor was raised to 69.2% from 48.3% in the previous year. And availability improved to 88.5% from 85.7% in the previous year.
The Board gave green signal to carry out feasibility for expansion.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital-paid-up: 8,802.53 8,802.53
Reserves & Surplus: 13,484.10 9,217.19
Shareholders Equity: 22,286.63 18,019.72
L.T. Debts: 8,853.84 10,956.11
Staff Retirement Benefits: 258.68 216.17
Current Liabilities: 5,330.91 3,718.29
Fixed Assets: 23,714.73 24,281.92
Intangible Assets: 0.33 0.41
L.T. Loans & Deposits: 687.78 686.42
Current Assets: 12,327.22 7,941.54
Total Assets: 36,730.06 32,910.29
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Sales, Profit & Pay Out
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Sales: 27,563.55 21,842.27
Gross Profit: 9,736.54 8,559.96
Other Operating Income: 342.19 262.65
Profit from Operations: 9,895.30 8,709.13
Finance (Cost): (1,766.73) (2,028.03)
(Depreciation): (1,674.70) (1,599.58)
Profit Before Taxation: 8,128.57 6,681.10
Profit After Taxation: 8,047.79 6,936.43
Earnings Per Share (Rs): 9.14 7.88
Dividend: 3,781 5,000
Share Price (Rs) on 31/10/05: 41.10 -
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Financial Ratios
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Price/Earning Ratio: 4.50 -
Book Value Per Share: 25.32 20.47
Price/Book Value Ratio: 1.62 -
Debt/Equity Ratio: 28:72 38:62
Current Ratio: 2.50 2.14
Asset Turn Over Ratio: 0.75 0.66
Days Receivables: 5 34
Days Inventory: 54 16
Gross Profit Margin (%): 35.32 39.19
Net Profit Margin (%): 29.20 31.76
R.O.A (%): 21.91 21.08
R.O.C.E (%): 25.63 37.76
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Capacity & Production MWH Actual Dependable Capacity
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Based on 8,760 Hours --: 11,755.920 11,755.920
Actual Energy Delivered: 8,134.588 5,698.261
Capacity Utilisation (%): 69.20 48.47
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COMPANY INFORMATION: Chairman: Imtiaz Anjum; Chief Executive: Malcolm P. Clampin; Director: Vince Richard Harris; GM Finance/CFO: Mohtashim Aftab;
Company Secretary: A. Anthony Rath; Registered Office: No 12 Street-No 30 F-61, Islamabad; Corporate Office: 404, Siddiq Trade Center 72-Main Boulevard Gulberg Lahore; Web Address: www.kapco.com.pk Power Project Kot Addu Power Complex Kot Addu District Muzaffargarh (Punjab).
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