Fakiha Tariq

Pakistan’s large-cap power generation and distribution companies collectively posted a 12% increase in revenue, but a 28% decrease in gross profits in the first six months (July-Dec) of the ongoing fiscal year 2022-23 compared to the corresponding period of FY22, reports WealthPK. The power generation and distribution sector comprises four large-cap companies on the Pakistan Stock Exchange with a collective market capitalisation of Rs186.4 billion.

The Hub Power Company Limited (HUBC) is the largest firm of the power sector with a market cap of Rs92 billion followed by K-Electric Limited (KEL), which has reported market value of Rs58.5 billion. Kot Addu Power Company Limited (KAPCO) and Pakgen Power Limited (PKGP) rank third and fourth with market caps of Rs25.3 billion and Rs10.6 billion, respectively.

Large power firms posted collective revenue of Rs362 billion in the first half of FY23 compared to Rs322 billion collected in the same period of FY22. Large-cap power firms’ gross profit dropped by 28% to Rs35 billion in 1HFY23 compared to Rs49 billion in 1HFY22.

The power sector giants collectively reported net loss of Rs4.9 billion in 1HFY23 though their overall net profit in 1HFY22 was Rs19 billion. High production and maintenance costs led to a massive decline in profits in 1HFY23.  Among four large firms, PKGP posted the highest sales growth of 130%, gross profit of 109% and net profit of 199% in 1HFY23 compared to 1HFY22.

Large power firms’ revenue – 1HFY22 vs 1HFY23

In the first half of FY23, KEL posted the highest revenue of Rs265 billion followed by PKGP with Rs45 billion. HUBC and KAPCO posted third and fourth-highest revenue of Rs25.8 billion and Rs25.1 billion, respectively, in 1HFY23.

PKGP showed the highest sales growth of130% in 1HFY23 compared to the corresponding period of last fiscal. KEL posted the second highest growth of 22%. However, HUBC and KAPCO posted decrease in sales by 18% and 53% in 1HFY23 compared to 1HFY22.

Large power firms’ gross profit – 1HFY22 vs 1HFY23

In the first half of FY23, KEL posted the highest gross profit of Rs18 billion followed by HUBC with Rs12 billion. PKGP and KAPCO posted third and fourth highest gross profit of Rs3.4 billion and Rs1.1 billion, respectively, in 1HFY23.

In 1HFY23, PKGP posted the highest 109% increase in gross profit value among the four large power firms compared to 1HFY22. HUBC posted gross profit growth of 10%, whereas KEL and KAPCO sustained decrease of 44% and 63% in the two comparable periods.

Large power firms’ net profit – 1HFY22 vs 1HFY23

In the first half of FY23, HUBC posted the highest net profit of Rs15 billion followed by Rs3.18 billion and Rs3.13 billion posted by KAPCO and PKGP, respectively. KEL remained the only large power firm, which posted net loss of Rs27 billion in 1HFY23.

PKGP grew its net profits by 199% from Rs1 billion to Rs3.1 billion, the highest among its peers, in 1HFY23 compared to 1HFY22. HUBC reported the second highest net profit growth of 74% among large power firms in 1HFY23. KAPCO and KEL reported decrease in net profit growth by 43% and 916%, respectively, in the first half FY23 compared to the same period of FY22.

Credit: Independent News Pakistan-WealthPk