(Updates with comment from analyst in third paragraph.)
Oct. 25 (Bloomberg) -- Kot Addu Power Co., Pakistan’s biggest non-state electricity producer, posted a 41 percent decline in first-quarter profit after maintenance and loan costs rose.
Net income in the three months ended Sept. 30 fell to 1.2 billion rupees ($13.8 million), or 1.36 rupees a share, from two billion rupees, or 2.31 rupees, a year earlier, the Lahore-based company said in a filing to the Karachi Stock Exchange today.
“The company has booked a huge maintenance cost this time, after it missed overhauling their plant last year because of floods,” Abdul Azeem, a research analyst with Invest Capital Markets Ltd., wrote in a note to clients on Oct. 21, recommending a “buy” on the stock. “Financial charges are also expected to rise on the back of an 800 million rupee loan the company took.”
Kot Addu operates a 1,600 megawatt plant that can use furnace oil, natural gas and diesel to generate electricity, which is sold to the state-run Water & Power Development Authority. The utility earns interest on delayed payments from Water & Power.
“The government still owes 54 billion rupees to the company against electricity bought from them during the year ended June, up from 41.6 billion a year ago,” Azeem said. The company’s efficiency cost is only 50 percent, which is also hurting growth.”
Kot Addu’s financial costs rose to 2.8 billion rupees from 2 billion rupees, according to the statement. Sales rose 36.4 percent to 22.1 billion rupees.
Kot Addu fell 1.5 percent to 42 rupees as of 10:29 a.m. in Karachi. The stock has climbed 3.2 percent this year.
--Editors: John Chacko, Naween A. Mangi
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