Pakistan’s two major companies belonging to energy sector are scheduled to announce their full year financial results for the period ended June, 30, 2013 on Wednesday, August 28, 2013. These are Kot Addu Power Company (KAPCO) an independent power producer and Pakistan State Oil (PSO) an oil marketing company. It is expected that payment of half a trillion rupees (approximately US$5 billion) by the Government of Pakistan (GoP) to clear circular debt is expected to have positive impact on earnings of companies belonging to energy sector.
KAPCO is expected to post profit after tax of Rs7,712 million (EPS: Rs8.76) for FY13 as compared to net profit of Rs7,071 million (EPS: Rs6.9) for FY12, posting a growth of 27%YoY. Analysts also expect the Company to announce divided of Rs4.5/share alongside the result, taking cumulative payout for the year to Rs7.5/share.
During 4QFY13, KAPCO realized a substantial benefit of Rs41.35 billion as settlement against circular debt from the GoP. The improved liquidity for the company is expected to result in higher generation going forward. Going forward, lower borrowing requirement is likely to pave the way for higher payouts, where analysts assume payout of Rs0/share or 90% for the ongoing financial year.
PSO is expected to post profit after tax of Rs12,142 million (EPS: Rs49.16) for FY13 as against net profit of Rs9,056 (EPS: Rs36.67) for FY12, a growth of 34%YoY. For 4QFY13, analysts expect the Company to post net profit of Rs2,825 million (EPS: Rs11.44) as compared to profit of Rs82.07 million (EPS: Rs0.33) for 4QFY12. PSO is also expected to announce dividend of Rs7/share alongside the result, taking the cumulative payout for FY13 to Rs9.5/share.
Key highlights of the FY13 result include 1) revenue growth of 17%YoY led by 25%YoY growth in motor gasoline volumes, 2) a decline in overall market share, 3) inventory gains of Rs920 million as against inventory loss of Rs2.4 billion an year ago, 4) currency losses of Rs3.4 billion as against currency loss of Rs8.7 billion a year ago and 5) a 26%YoY reduction in finance cost from lower short term borrowing during the year.