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Kapco announces Q3 result

KARACHI: The Kapco announced its third quarter 2008-09 result, which shows a growth of 9 percent on year on year basis Tuesday.

The company posted NPAT of Rs 4.17 billion against NPAT of Rs 3.82 billion in the corresponding period last year.

Topline rose by 44 percent YoY to reach Rs 53 billion in said period versus Rs 37 billion in the same period last year. The surge in topline is on the back of a weaker Rs against the greenback as Kapco’s tariff is indexed to the Us dollar and also due to a higher amount of electricity generated in the review period.

Earnings were also enhanced by a surge in the ‘other income’ head. Other income during said period was recorded at Rs 4 billion against Rs 720 million posted in the same period last year. This was likely due to a 1 to 3 percent spread earned between interest on late payments by Pepco and markup on short-term borrowing.

The financial costs were up 277 percent YoY at Rs 5.2 billion during same period. The heightened financial costs recorded during the review period were due to enhanced government receivables, which forced the company to avail short term financing in the then-prevailing high interest rate environment.

However, financing costs are expected to decline going forward with Pepco partially settling the outstanding receivables for Kapco by making a payment of Rs 32 billion in late March 2009. At current market price Kapco is trading slightly below our target base case fair value of Rs 41.70. staff report

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