Kot Addu Power Company's (Kapco) profit soared 86% to Rs11.7 billion in the six months ended December 31, 2019 on the back of high gross margins and other income.

The company had reported earnings of Rs6.3 billion in the same period of the previous year, according to a notice sent to the Pakistan Stock Exchange (PSX) on Friday.

Earnings per share came in at Rs13.32 in the period under review compared to Rs7.18 in the same period of the previous year.

On the other hand, the company's earnings in the three months ended December 31, 2019 were up 87% to Rs6.7 billion. Earnings per share increased to Rs7.60 in the period under review compared to Rs4.07 in the previous year.

Although sales recorded a marginal increase in the six-month period, the company's topline fell 28% to Rs9.1 billion in the second quarter of the fiscal year 2019-20.

Engro Corp's profit surges 23% to Rs21.9b

'The decline in sales was driven by lower dispatches. The load factor of the plant remained very low due to the availability of relatively cheaper sources of power generation (coal and hydel),' stated an AHL Research report.

'Gross margins went up 26 percentage points to 53.6% during 2QFY20. The rise in gross margins was mainly on account of lower dispatches and 26% year-on-year higher dollar indexation.'

Other income rose a massive 75% to Rs6.97 billion in the three-month period owing to tariff true-up along with higher interest rates compared to the same period of last year.

Meanwhile, finance cost also recorded a jump of 7% to Rs2.5 billion in the three-month period due to higher short-term borrowings.

Kapco's share price increased Rs0.36 or 1.36% to close at Rs26.78 with trading in 7.5 million shares at the PSX.

© Pakistan Press International, source Asianet-Pakistan