Pakistan IPPs: Expect flattish earnings in 2Q results; focus on payout
​IMS Universe IPPs are expected to post cumulative profits down 2.6%YoY and up 7.0%QoQ in 2QFY17. Overall, earnings and payouts are expected to be flattish on account of greater generation on hydel and higher RFO prices.
For 2QFY17, we expect HUBC to post unconsolidated EPS of PkR1.96 (PkR2.3 consolidated) where we expect it to continue to book higher O&Ms because of major overhaul of one unit of base plant and in Narowal. For KAPCO, we expect EPS of PkR2.66 coupled with better LNG provision and declining RFO generation.
NPL is expected to post an EPS of PkR2.21 led by sharply lower fuel efficiency gains compared to both previous quarter and last year. NCPL is expected to post an EPS of PkR1.87 in 2QFY17 where the expected decline in earnings is due to lower efficiency gains, which are also expected on account of rising RFO prices, in our view.
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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