KAPCO 2QFY18 Result: In line; DPS of PRs4.35
- Kot Addu Power Company Ltd (KAPCO) posted 2QFY18 NPAT of PRs2.21bn (EPS: PRs2.52), up 20% YoY. This takes 1HFY18 NPAT to PRs4.40bn (EPS: PRs5.00), up 5% YoY. The result was in line with our expectation. Alongside the result, KAPCO announced 1st interim cash dividend of PRs4.35/sh.
- Result highlights included: (i) 22%YoY increase in topline courtesy higher 25% YoY higher oil price and higher dispatch factors (2QFY18: 56% vs. 2QFY17: 40%), (ii) stable gross margins in the absence of hefty O&M expenses, (iii) 29% YoY higher other income owing to higher receivables and, (iv) 47% YoY higher finance cost.
- On a sequential basis, the earnings remained flattish, up 2% QoQ. The gross profits declined 7% QoQ; however, 13% QoQ higher other income and 7% QoQ lower finance cost offset the negative impact.
- We maintain a Neutral stance on the scrip with a TP of PRs61/sh, offering an upside of 4.4% and D/Y of 17.1%.
Kot Addu Power Co Ltd. Kot Addu Power Company Limited is a Pakistan-based power generation company. The Company's principal activities are to own, operate and maintain a multi-fuel fired power station with approximately 15 generating units with a nameplate capacity of 1,600 megawatts (MW) in Kot Addu, District Muzaffargarh, Punjab, Pakistan. The Company also sells the electricity produced therefrom to a single customer, the Pakistan water and power development authority. The power plant is a multi-fuel gas-turbine power plant using three fuels to generate electricity: gas, light sulfur furnace oil and high speed diesel. The plant's combined cycle technology enables it to use the waste heat from the gas turbine exhaust to produce steam in the heat recovery steam generator, which in turn is used to run the steam turbines.
Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.
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