The Bell about Electricity – Elixir Securities Limited

Karachi: NPL‐ FY11 EPS expected at 6.76

According to Elixir Securities Limited,

NPL Outstanding shares: 354mn

PKRmn 4QFY11E 3QFY11A QoQFY11EFY10AYoY
Turnover  5,1625,524-7%20,3571,0181,899%
Cost of sales  3,788 4,152 -9%14,9367961,778%
Gross Profit  1,3741,371 0%5,4212232,333%
Administrative expenses99-4%3817122%
Other Operating expenses17 3  573%36   0 3,600% 
Other Operating Income  117 49%4152-22%
Profit / (loss) from operations1,3591367 -1%5,3882581,991%
Finance Cost  7927476%2,9821851,508%
Profit / (loss) before taxation 567620-8%2,406723,232%
Taxation22  -32%12 25 -51% 
Profit / (Loss) for the period 565  617  -8% 2,394  474,974%
EPS (PKR) 1.601.74 -8% 6.760.134,974%

Source: Company Accounts, Elixir Research

O&M and fuel savings to support earnings

Generation for NPL during 4Q stood at 338Gwh, at an average load factor of 79%, taking full year generation to 1,473Gwh at a load factor of 86%. We expect O&M savings during 4QFY11 to stand at PKR195mn (PKR0.55/share), at 60% of allowed tariff. Full year O&M costs are expected at PKR366mn, taking full year maintenance savings to PKR968bn (PKR2.73/share). We expect fuel savings for 4Q at PKR71mn (PKR0.20/share) at fuel savings rate of 4gms/kwh, down 17% QoQ, taking full year savings to PKR363 (PKR1.02/share).

Spread Income to contribute PKR1.57 to FY11 EPS

Net penal interest income for the year is expected at PKR555mn (PKR1.57/share), with PKR173mn (PKR.49/share) expected for 4Q, primarily on the back of continued rise in receivables during the quarter. However, we expect receivables of NPL to ease at the end of FY11 and stand at PKR7.8bn, as NPL received major payments on June 28, 2011, after it invoked sovereign guarantee along with three other IPPs.