The financial performance of the countrys largest IPP, Kot Addu Power Company Limited (PSX: KAPCO) took a beating in the second quarter of FY17, which resulted in overall sluggish bottomline for 1HFY17 vis--vis 1HFY16. Improvement in generation as well as the direct costs were hoped to keep the earnings growth in check.
However, the latest announcement by the firm on the stock exchange shows otherwise; sales decline by 22 percent year-on-year in 2QFY17 and by four percent year-on-year in 1HFY17. Gross profit was lower by 20 percent in the latest quarter due to lower than estimated efficiency levels or higher than estimated maintenance charges. Also, net profit for 1HFY17 was restricted by 14.6 percent higher finance cost as short term borrowing increase. Increase in penal income, a large portion of their income, supported the bottomline in the first six months of FY17.
On the power companys privatisation, the process has hit a snag, The process picked up slightly when the Privatisation Commission (PC) approved Dubai Islamic Bank-led consortium as financial advisor for strategic sale of the governments remaining stake. However, the Privatisation Division to the Cabinet Committee on Privatization (CCoP) has reportedly highlighted that the liquidity damages on Kapcos financial statements is creating hurdles in its privatisation
Comments
Comments are closed.