KAPCO earning dips on higher maintenance cost – WE Research

KAPCO earning dips on higher maintenance cost – WE Research

By: WE Financial Services Limited

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In our today’s morning briefing we would discuss the performance of Kot Addu Power Company Limited (KAPCO) and would give recommendation on the scrip.

1HFY14: PAT declines 23% YoY

Owing to increase in repair & maintenance cost and decline in interest income, the cumulative earning of KAPCO declined by 23% YoY in 1HFY14 to Rs 2,844 million (EPS: Rs 3.23) as compared to a profit after taxation (PAT) of Rs 3,683 million (EPS: Rs 4.18) in 1HFY13. The QoQ decline was more significant as the company earned a PAT of Rs 1,119 million (EPS: Rs 1.27) in 2QFY14 which is 35% less from a PAT of Rs 1,726 million (EPS: Rs1.96) in 1QFY14. The surge in repair & maintenance cost and higher taxation were the key factors that affected the earnings during the period. The repair & cost was higher due to major overhaul of steam & gas turbines. The corporate results were accompanied with an interim cash dividend of Rs 2.75/share.