KARACHI: Kot Addu Power Company (Kapco) reported profit-after-tax at Rs2.41bn, representing earnings per share (eps) at Rs2.74 for the first-quarter FY15. It reflected stellar growth of 40pc from Rs1.73bn or eps at Rs1.96 YoY.

Analyst Ali Asghar Poonawala at AKD Securities stated that in the absence of any major overhauls, the plant operated at a 77pc load factor (during July and August) against an average load factor of 54pc achieved during 1QFY14.Other income supplemented earnings to keep the bottom-line afloat, with a stark 151pcYoY increase to Rs1.63bn.

Key result highlights were said to include increasing load factor, which led to overall increase in gross margins, the company’s gross margins. However, due to buildup of circular debt, the company during 1QFY15 relied heavily on borrowed funds to run its operations, which was evident by a 2.3 times YoY increase in finance cost to Rs1.87bn in 1QFY15 against Rs806m in the same period last year.

The analysts also noted that the company’s earnings showcased a splendid growth despite the company paying tax at 32pc in 1QFY15 compared to 26pc in 1QFY14.

Millat Tractors: The company reported 1QFY15 net earnings at 489m (eps Rs11.03) compared to net earnings of Rs248m (eps Rs5.59) YoY, thus showing a growth of 97pc. Analysts at Taurus Securities observed that the 1QFY15 results showed increase in profitability mainly due to jump in volumes (up 85pc YoY), due to applicability of lower GST rate of 10pc from 16pc in FY15 budget.

Likewise, gross margins improved to 19pc from 15pc in the comparable period of earlier year. On a QoQ basis, 1QFY15 earnings were up by 8pc QoQ despite the volumetric sales declining by 3pc QoQ due to rains and floods. Operating profit showed an increment of 4pc QoQ due to lower operating expenses.

Published in Dawn, October 28th, 2014