Author Topic: KAPCO -- Kot Addu Power  (Read 89736 times)

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Toshi

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KAPCO -- Kot Addu Power
« Reply #-1 on: October 10, 2008, 02:56:01 PM »
All About Kot Addu Power
« Last Edit: February 01, 2012, 03:02:10 PM by M&M »

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KAPCO -- Kot Addu Power
« Reply #-1 on: October 10, 2008, 02:56:01 PM »

Lucky Bhai

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Re: KAPCO -- Kot Addu Power
« on: September 14, 2009, 03:06:36 PM »
Hi, I am new to stock market.
I have kapco at 53.95.Now guide me hold or sel.

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Re: KAPCO -- Kot Addu Power
« Reply #1 on: September 14, 2009, 03:13:39 PM »
Hi, I am new to stock market.
I have kapco at 53.95.Now guide me hold or sel.

market is at its high
kapco is good dividend yieldin stock
if u have a small holdin better hold

better keep cash to invest once market takes a correction

Offline Admin

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Re: KAPCO -- Kot Addu Power
« Reply #2 on: October 26, 2009, 04:41:25 PM »

KAPCO: 1QFY10 Result Preview

Kot Addu Power Company Ltd. (Kapco) is expected to announce its 1QFY10 results today. Kapco is expected to record a 5%YoY growth in earnings to reach PkR1,611mn in 1QFY10 compared with PkR1,536mn posted in 1QFY09. This translates into an EPS of PkR1.83 in 1QFY10 versus an EPS of PkR1.75 during the same period last year.   

Offline Learner7

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Re: KAPCO -- Kot Addu Power
« Reply #3 on: October 27, 2009, 11:24:47 AM »
Pakistan’s Kot Addu Power First-Quarter Profit Declines 13%  

Oct. 27 (Bloomberg) -- Kot Addu Power Co., Pakistan’s biggest non-state electricity producer, posted a 13 percent decline in first-quarter profit.

Net income in the three months ended Sept. 30 fell to 1.34 billion rupees ($16.02 million), or 1.52 rupees a share, from 1.54 billion rupees, or 1.75 rupees a year earlier, the Lahore- based company said in a filing to the Karachi Stock Exchange today. Revenue fell to 20.3 billion rupees from 22.5 billion rupees.

Offline co2

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Re: KAPCO -- Kot Addu Power
« Reply #4 on: November 14, 2009, 01:12:07 PM »
is ka dividend kab aye ga
An investor without investment objectives is like a traveler without a destination.  ~Ralph Seger

Toshi

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Re: KAPCO -- Kot Addu Power
« Reply #5 on: November 14, 2009, 01:58:25 PM »
is ka dividend kab aye ga

I'm also waiting for dividend.

Offline abcd

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Re: KAPCO -- Kot Addu Power
« Reply #6 on: November 14, 2009, 03:28:17 PM »
is ka dividend kab aye ga

I'm also waiting for dividend.
i m also in fact some kapco always part of portfolio
Stock trading is a science and art too

Toshi

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Re: KAPCO -- Kot Addu Power
« Reply #7 on: November 14, 2009, 05:08:43 PM »
kapco must be part of portfolio.

Offline abcd

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Re: KAPCO -- Kot Addu Power
« Reply #8 on: November 14, 2009, 06:12:29 PM »
kapco must be part of portfolio.
true
Stock trading is a science and art too

Offline Mansoor1

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Re: KAPCO -- Kot Addu Power
« Reply #9 on: November 14, 2009, 07:06:25 PM »
kapco must be part of portfolio.

For the time being, Kapco is showing weakness.
**********

Offline abcd

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Re: KAPCO -- Kot Addu Power
« Reply #10 on: November 14, 2009, 10:47:38 PM »
kapco must be part of portfolio.

For the time being, Kapco is showing weakness.
nothing significant down side is limited
Stock trading is a science and art too

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Re: KAPCO -- Kot Addu Power
« Reply #11 on: November 27, 2009, 11:03:04 AM »
Kapco accused of withholding payment to PSO

MUSHTAQ GHUMMAN
ISLAMABAD (November 27 2009): Pakistan State Oil (PSO) has accused Kot Addu Power Company Limited (Kapco) of financing its working capital requirements by withholding the payment due to the former, official sources told Business Recorder on Thursday.

The sources said the PSO had always considered Kapco as its most valued customer, which was evident from the fact that during the course of their commercial relationship, the oil supplier successfully maintained the continuity of supply to the power plant in spite of substantial setbacks suffered due to various circumstances and decisions beyond its control. However, it has been observed that since August 2008, the Kapco is not seriously considering resolution of the issue - making advance payments as per OSA.

On a close examination of the Kapco's financial statements, the PSO has noted with concern that the finance under mark-up arrangements (with banks) in December 2008, was Rs 24.4 billion and in September 2009, it was Rs 2.3 billion, which shows a difference Rs 22.1 billion.

Payable to the PSO (as per Kapco's books) in December 2008, was Rs 14.3 billion and in September 2009, Rs 8.3 billion with a difference of rupees six billion.

According to the sources, trade receivables in December 2008 were Rs 46 billion and in September 2009, Rs 21 billion, indicating a difference of Rs 25.4 billion.

The sources said that analysis clearly showed that the Kapco was financing its working capital requirements by not making payments to the PSO through its overdraft lines. The PSO's receivables from the Kapco currently stand at Rs 11.2 billion and the interest accrued, as of Oct. 31, 2009 is Rs 2.8 billion.

"We also understand that the Kapco has already recovered this financial cost from the Water and Power Development Authority (Wapda). Due to the non-payment of Rs 14 billion, we are apprehending a default on our letter of credit (LC) payments within the next few days, and consequently we will not be able to arrange fuel oil for the Kapco," the sources quoted PSO as writing to the Kapco's Chief Executive Officer (CEO). "Under the circumstances, when the Kapco is envisaging high demand of LSFO in the coming winter season, it should take proactive measures as a commercial entity and a buyer under the OSA to procure and arrange funds for liquidating its dues to the PSO," the sources quoted oil supplier as advising the company.

Considering the stringent liquidity position of the PSO, and in order to ensure the undisturbed supply chain, the PSO has requested the Kapco to immediately disburse Rs 14 billion

Offline abcd

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Re: KAPCO -- Kot Addu Power
« Reply #12 on: November 27, 2009, 02:06:16 PM »
Kapco accused of withholding payment to PSO

MUSHTAQ GHUMMAN
ISLAMABAD (November 27 2009): Pakistan State Oil (PSO) has accused Kot Addu Power Company Limited (Kapco) of financing its working capital requirements by withholding the payment due to the former, official sources told Business Recorder on Thursday.

The sources said the PSO had always considered Kapco as its most valued customer, which was evident from the fact that during the course of their commercial relationship, the oil supplier successfully maintained the continuity of supply to the power plant in spite of substantial setbacks suffered due to various circumstances and decisions beyond its control. However, it has been observed that since August 2008, the Kapco is not seriously considering resolution of the issue - making advance payments as per OSA.

On a close examination of the Kapco's financial statements, the PSO has noted with concern that the finance under mark-up arrangements (with banks) in December 2008, was Rs 24.4 billion and in September 2009, it was Rs 2.3 billion, which shows a difference Rs 22.1 billion.

Payable to the PSO (as per Kapco's books) in December 2008, was Rs 14.3 billion and in September 2009, Rs 8.3 billion with a difference of rupees six billion.

According to the sources, trade receivables in December 2008 were Rs 46 billion and in September 2009, Rs 21 billion, indicating a difference of Rs 25.4 billion.

The sources said that analysis clearly showed that the Kapco was financing its working capital requirements by not making payments to the PSO through its overdraft lines. The PSO's receivables from the Kapco currently stand at Rs 11.2 billion and the interest accrued, as of Oct. 31, 2009 is Rs 2.8 billion.

"We also understand that the Kapco has already recovered this financial cost from the Water and Power Development Authority (Wapda). Due to the non-payment of Rs 14 billion, we are apprehending a default on our letter of credit (LC) payments within the next few days, and consequently we will not be able to arrange fuel oil for the Kapco," the sources quoted PSO as writing to the Kapco's Chief Executive Officer (CEO). "Under the circumstances, when the Kapco is envisaging high demand of LSFO in the coming winter season, it should take proactive measures as a commercial entity and a buyer under the OSA to procure and arrange funds for liquidating its dues to the PSO," the sources quoted oil supplier as advising the company.

Considering the stringent liquidity position of the PSO, and in order to ensure the undisturbed supply chain, the PSO has requested the Kapco to immediately disburse Rs 14 billion
nothing important,pakistani style hay bhai,not paying in time
Stock trading is a science and art too

Offline abcd

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KAPCO -- Dividend
« Reply #13 on: November 27, 2009, 06:21:39 PM »
dividend is despatched
Stock trading is a science and art too

Toshi

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Re: KAPCO -- Dividend
« Reply #14 on: November 27, 2009, 06:59:59 PM »
Quote from: Baba Jee link=topic=164.msg9163#msges9163 date=1259328099
dividend is despatched

yes still on its way,hopefully reach in account after eid holidays.

Offline abcd

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Re: KAPCO -- Dividend
« Reply #15 on: November 27, 2009, 07:13:08 PM »
Quote from: Baba Jee link=topic=164.msg9163#msges9163 date=1259328099
dividend is despatched

yes still on its way,hopefully reach in account after eid holidays.
no prob,amound is gud and will b of use
Stock trading is a science and art too

Offline Admin

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Re: KAPCO -- Kot Addu Power
« Reply #16 on: December 03, 2009, 12:21:10 PM »
Expansion project update

Owing to the prevailing liquidity constraints, the company has
reduced its proposed 450MW expansion project to 280MW.
The company has completed the feasibility and technical
studies but has not yet approached the government
authorities for tariff determination and other regulatory
procedures.

Recommendation: ‘Hold’ maintained
Currently, KAPCO offers Rupee and US$ IRR of 18.5% and
16.5% respectively. The stock also offers FY10E dividend
yield of 12.7%. At these levels, we maintain our ‘Hold’ stance
on the stock

Offline Farzooq

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Re: KAPCO -- Kot Addu Power
« Reply #17 on: December 19, 2009, 10:35:26 AM »
KAPCO): KOT ADDU POWER COMPANY - (Analysis Financial Statements 2008-2009)

OVERVIEW (December 19 2009): Introduction to the industry: Power sector in Pakistan has been in limelight for a couple of years now. With the gap between demand and supply increasing, the companies also continue the problem of acute liquidity shortage because of circular debt.

To exacerbate the situation, losses in the transportation of electricity go up to around 40%. Surging fuel prices also worsened the situation of the sector. The question that most investors ask is regarding the reason this crisis happened and the answer is simple: The governments did not approve power projects with the increment in demand. Following table issued by Private Power and Infrastructure Board of Government of Pakistan shows the inflated deficits in the sector that have been projected:

=====================================================================================================================================================
Supply and Demand Position: 2008-2020 (MW)
=====================================================================================================================================================
                                   2008     2009     2010     2011     2012     2013     2014     2015     2016     2017     2018      2019      2020
=====================================================================================================================================================
Existing Generation              15,903   15,903   15,903   15,903   15,903   15,903   15,903   15,903   15,903   15,903   15,903    15,903    15,903
Proposal/Committed Generation       530    4,235    7,226   10,115   10,556   13,307   13,520   14,607   16,134   18,448   18,448    18,448    18,448
Total Existing/
Committed Generation             16,484   20,138   23,129   26,018   26,459   29,210   29,423   30,510   32,037   34,351   34,351    34,351    34,351
Expected Available Generation    13,146   16,110   18,503   20,814   21,167   23,368   23,538   24,408   25,630   27,481   27,481    27,481    27,481
Demand (Summer Peak)             16,484   17,868   19,352   20,874   22,460   24,126   25,919   28,029   30,223   35,504   34,918    37,907    41,132
Surplus/Deficit Generation       -3,338   -1,758     -849      -60   -1,293     -758   -2,381   -3,621   -4,593   -8,023   -7,437   -10,426   -13,651
=====================================================================================================================================================
INTRODUCTION TO THE COMPANY

Kot Addu Power Company Limited (KAPCO) was incorporated in Pakistan on April 25, 1996 as a public limited Company. The Company was listed on April 18, 2005 on the Karachi, Islamabad and Lahore Stock Exchanges. The principal activities of the Company are to own, operate and maintain a Multi-fuel fired power station with fifteen generating units with a nameplate capacity of 1,600 MW in Kot Addu, District Muzaffargarh (Punjab), Pakistan.

The company is one of the largest independent power plants in Pakistan and it enjoys key significance as it is listed on all three stock exchanges and represented on KSE 100 and KSE 30. Its only customer is WAPDA and therefore, the company faces a problem of debt servicing. Two tranches of circular debt have been received but still a huge amount still remains to be repaid. This is discussed below in further detail.

LIQUIDITY

Before analyzing the liquidity of KAPCO for FY 08-09 suppliers and customers need to be discussed first. It has been mentioned that WAPDA, the only customer of KAPCO has not paid its dues. One must understand that these are not written-off because the government of Pakistan has given guarantee for it and these are in ordinary course of business a. However, these payments get charged of interest worth discount rate + 4% in case of delay. Likewise, they have to pay to PSO only, a state owned company, 15.48 billion rupees. This go up to 80.58% of KAPCO's payables.

This situation of circular debt does not bother KAPCO in real terms because both PSO and WAPDA are state owned companies and as one will pay the other will get payment. The situation can nevertheless be bad for KAPCO the case that WAPDA imposes liquidity penalty of KAPCO for not supplying power on time. This has been predicted by the company. KAPCO, on the other hand, maintains the stance that it was due to WAPDA's delayed payment that KACPCO failed to properly supply power. This is noteworthy that their current assets now stand 188% of their current liabilities. This is an increment of 35.71% for FY 08-09. The main driver for this is the trade debts that are to be collected from WAPDA and they alone rose up by 58.46%.

PROFITABILITY

Sales volume for KAPCO for 2008-09 increased by 23.98% as the power prices shot up in the region. However the cost of sales increased by 25.26% that led to 15.23% decline in profit to sales ratio. There's was 26% increment in the cost of sales for KAPCO for FY 08-09. The reason for increased fuel cost is the high prices of fuel that kept their high levels despite the slowdown in global economy. The increased cost also led to significant drop in returns to assets and to common equity. Now for every 100 rupees of asset 11 rupee return has been generated and for each 100 of equity, the return is 36 rupees. This would be considered very good performance if we compare it to HUBCO for FY 08-09. The comparison graph shows that KAPCO has outperformed HUBCO in terms of profitability.

VOLATILITY

The stock being very volatile due to the movements in the oil prices showed a variance of 15.85 rupees with a mean of 38.78 rupees. The FY 08-09 also witnessed an average daily volume of 16.855 billion shares of KAPCO, which represents the liquidity in its stock. If we compare it with HUBCO whose stock showed mean return of 21.94 rupees with 15.81 rupee variance, KAPCO seems to give more return in about the same risk!

DEBT MANAGEMENT

KAPCO's debt as a ratio of equity is declining. For FY 08-09, KAPCO witnessed 19.37% decrease in the debt to asset ratio bringing the finance structure to almost ideal 50:50. The decrement has happened because of the payment of circular debt by the virtue of which they were able to pay back their supplier PSO. Another significant decline has happened in the finance under mark up, which showed a decline of 14.88%. Comparing it with HUBCO shows that HUBCO is more leveraged in this interest regime, it is better to have more equity than debt. Hence, KAPCO is better off over there. However, TIE ratio is lower for KAPCO which indicates that HUBCO is in better position to pay off its loans. As mentioned earlier that KAPCO has only one customer that is a government entity thereby once payment is received from them, further payments can be easily made.

ASSET MANAGEMENT

When analyzing the asset side of power Generation Company, we must look at it from the scenario that there is a problem of circular debt and abnormally large value for collection period. The number of days to sell of the inventory have reduced by 8 days and they it takes KAPCO just 22.9 days to produce electricity and supply it to WAPDA but it takes now 241 days which is 32% higher than last year.

This has led to an increased operating cycle. This will hurt the management in the way that they cannot plan their inflows and outflows until the circular debt issue isn't completely resolved. It would keep their cycle abnormally high. Comparing it with HUBCO shows that the assets are better being managed by HUBCO that is obvious because there is only one customer of WAPDA, a state entity. Being only customer and that too owned by the state increases its bargaining power and cause problems for KAPCO.

MARKET VALUE

Markets faced a collapse in 2008-09 when KSE lost more than half its value. Floor had also been imposed in the market. But still KAPCO continued to prove itself as a blue chip company giving good yields and good dividends despite bleak situation in the economy. Though the dividend per share reduced by 30.10% to just Rs 4.35/share, it is still encouraging keeping in view the difficult situation.

If we compare it with HUBCO for FY 08-09, we can see that the earnings have been better but the prices have not really responded to the better earnings giving low P/E multiple as compared to HUBCO. The earnings per share for KAPCO is 97% higher than HUBCO (KAPCO=Rs 6.44 HUBCO= Rs 3.27). However, the P/E multiple is just 89% of that of HUBCO. This shows that investors have not responded well to the earnings In comparison of HUBCO, KAPCO seems to be underpriced in the market.

FUTURE OUTLOOK

The payments to be received in form of the circular debt will surely improve the liquidity. The increased power tariffs as part of IMF's restructuring program will also lead to increased revenues. The market mechanism will lead the prices to go up in order to respond to the earnings and high dividend. Lastly expansion plans also look to increase their productivity. Hence, for an investor looking to have high yield and high return may invest in it.
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Re: KAPCO -- Kot Addu Power
« Reply #18 on: December 29, 2009, 12:41:12 PM »
bm by 5th feb
expected eps 3
target 48