Kot Addu Power Company (KAPCO) released its financial results for the fiscal year 2025 on September 15, 2025, revealing an earnings per share (EPS) of PKR 2.88, marking a significant 41% decline quarter-on-quarter (QoQ). The announcement, detailed by Arif Habib Limited (AHL), highlights the company’s performance following the expiration of its previous Power Purchase Agreement (PPA) and the recent adoption of a new tri-partite agreement.
Financial Highlights
The FY25 earnings reflect a challenging quarter for KAPCO, with the EPS drop attributed to several factors:
- Major Income Source: A significant portion of the earnings came from other income, primarily conventional and Islamic mutual funds managed by different Asset Management Companies (AMCs).
- PPA Expiration: The company’s previous PPA expired in June 2021, impacting revenue streams until a new agreement was secured.
- New Tri-Partite PPA: KAPCO entered a 3-year Tri-Partite PPA with the Central Power Purchasing Agency-Guarantee (CPPA-G) and National Grid Company of Pakistan Limited (NGPCL), effective from June 4, 2025. However, this new agreement had only a one-month impact on the reported quarter.
The financial statement indicates a net profit of PKR 1,563 million for FY25, with administrative expenses and other operational costs also influencing the bottom line.
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Operational and Strategic Updates
KAPCO’s performance is tied to its operational adjustments and future plans:
- Power Generation: The company continues to operate its 1,600 MW multi-fuel power plant in Kot Addu, Punjab, though utilization rates have been affected by the PPA transition.
- Future Projects: KAPCO is exploring two solar projects (150 MW and 120 MW), pending NEPRA approval, which could diversify its energy portfolio.
- Joint Control: The company is in discussions for joint control with ACPL, with an expected holding of 42.03%.
These developments signal KAPCO’s efforts to adapt to changing market dynamics and regulatory frameworks.
Market and Investor Impact
The 41% QoQ decline in EPS has raised questions among investors, though the new PPA and potential solar ventures offer hope for recovery. AHL’s analysis suggests that while the current quarter reflects a dip, the long-term outlook could improve with stable power agreements and diversified income.
- Stock Reaction: Shares may see volatility as investors assess the impact of the PPA transition.
- Investor Confidence: The focus on mutual fund income and future projects could bolster confidence if executed well.
Investors are advised to review the full AHL report for a deeper understanding.
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See this X post from @ArifHabibLtd for real-time market sentiment:
Looking Ahead
KAPCO’s financial health in the coming quarters will depend on the full implementation of the new PPA and progress on solar projects. The company’s ability to leverage mutual fund income and secure regulatory approvals will be critical.
Stay updated with Nawa Times for the latest on KAPCO’s performance and Pakistan’s energy sector.
