Shams ul Nisa

Nishat Power Limited, a key player in Pakistan's energy sector, reported a massive reduction in the total dispatch of electricity in the first quarter of the ongoing fiscal year 2024-25, reports WealthPK.

The dispatch was only 28GWh in 1QFY25, compared to 231GWh in the same quarter of FY24. The reduction can be attributed to various factors, including market dynamics and operational adjustments. During this period, Nishat Power's plant operated at an average capacity factor of 6.59%, a significant drop from the previous year’s 53.59%. Established on February 23, 2007, Nishat Power Limited is a subsidiary of Nishat Mills Limited.

The company’s main role is to develop, own, operate and manage a 200MW fuel-based power plant in Jamber Kalan area of Pattoki tehsil of Kasur district, Punjab. Nishat Power's financial results for the first quarter of the ongoing fiscal reflect resilience despite challenges. The company reported a turnover of Rs2.731 billion in 1QFY25, down from Rs9.788 billion in September 2023.

However, it still managed to achieve a gross profit of Rs1.411 billion in 1QFY25, slightly up from Rs1.397 billion during the same period of FY24. Furthermore, the net profit for the quarter stood at Rs1.652 billion, leading to earnings per share of Rs4.67, an increase from Rs4.12 in 1QFY24. This growth in profitability highlights the company's effective cost management strategies amidst fluctuating revenues.

Despite achieving positive results, Nishat Power continues to face challenges due to its power purchaser's failure to meet payment obligations. As of September 30, 2024, the company’s total receivables stood at Rs15.584 billion, with overdue amounts reaching Rs13.404 billion. To address these issues, Nishat Power has taken proactive measures, including engaging with relevant authorities and issuing default notices in accordance with their agreements.

Furthermore, the Board of Directors of Nishat Power Limited has announced an interim cash dividend of 20%, which translates to Rs2 per share, amounting to a total distribution of Rs708.177 million for the quarter ended September 30, 2024. This decision reflects the company's commitment to providing returns to its shareholders despite the challenging economic landscape and the ongoing stagnation in the power sector. Looking ahead, Nishat Power will focus on enhancing operational efficiency and increasing its capacity factor.

The management is optimistic that ongoing improvements and strategic initiatives will help increase electricity dispatch and improve financial performance in the coming quarters. Thus, despite facing market challenges, Nishat Power Limited's recent report reflects a robust operational framework. With strategic focus and commitment to excellence, the company is poised for recovery and growth in Pakistan's energy landscape.

Credit: INP-WealthPk