KAPCO: Kot Addu Power Co Ltd 3rd Quarter - Mar 2024
In the third quarter of the current financial year, the earnings per share (EPS) for KAPCO stood at Rs. 1.3, with a cumulative EPS of Rs. 4.07 for the nine-month period. Comparatively, in the same quarter last year, the EPS was Rs. 0.78, and for the nine-month period, it was Rs. 4.4.
This quarter did not see any dividend distribution, as KAPCO had already disbursed Rs. 4.5 per share as an interim dividend in the second quarter of this financial year.
The electricity sector in Pakistan is undergoing significant changes. The true value of KAPCO will only become apparent in this evolving landscape and how it adapts to it.
KAPCO's primary source of income is interest earned on PIB/Sukuk. Its financial charges remain substantial, accounting for over 35% of earnings before interest and taxes for the third quarter, although they are showing a declining trend. The tax rate stands close to 30% for the nine-month period of this year.
KAPCO's Power Purchase Agreement expired almost 18 months ago, resulting in the plant being shut down and mothballed. Consequently, there has been no revenue since October 2022 due to the PPA expiry.
Currently, KAPCO's stock is trading at a market price of Rs. 27.7, experiencing a year-to-date decline of 2.3%, compared to the KSE100 Index's rise of 10.6%.
In the KSE100 Index, KAPCO holds a modest 0.58% weight and has no representation in the KSE30 and KMI30 indices.
Brief Background:
KAPCO's generation license has been extended until September 2024.
According to management statements in a corporate brief, the Government of Pakistan has initiated the Competitive Trading Bilateral Contract Market (CTBCM). However, there have been some delays in its implementation, with full implementation expected by June 2024. KAPCO aims to participate in the CTBCM, particularly in the Energy blocks for which NEPRA does not provide tariffs.
WAPDA owns 40.25% of KAPCO. In June 1996, 36% of KAPCO was sold to National Power UK with management control.
KAPCO's plant has a capacity of 1600 MW and is capable of using multiple fuels including LSFO, Gas/RLNG, and HSD.
It boasts the largest oil storage capacity among IPPs and has dedicated pipelines for fuel and Gas/RLNG supply (300MMCFD).
Strategically located in central Pakistan.
For more information, refer to the announcement for the 3rd Quarter of March 2024 and the Corporate Presentation.
