NEPRA has notified Post-COD tariff for HUBC-Narowal power plant yesterday. Following is the summary of the development and impact on earnings estimate
- According to the reference tariff the total project cost is determined at USD267mn against USD308mn claimed by the company and initially determined (Pre-COD) cost of USD274mn
- Though total project cost has declined in dollar terms, the cost was much higher in local currency due to persistent devaluation of PKR
- Levelized tariff is determined at PKR15.66/kwh or USD0.186/kwh against initially determined levelized tariff of USD0.13/kwh, depicting an increase of 45%. The uptick reflects cost adjustments as well as re-basing of indexation factor including Exchange rate, RFO Prices and US CPI
- Our initial estimates suggest HUBC-Narowal to clock in a profit of PKR1.31bn (EPS: PKR1.24/share) for FY12 based on post COD tariff. Accordingly, we will publish further details later today as we are still in the process of revising our earnings expectation and fair value estimate for HUBC whilst incorporating one-time prior year tax adjustment (PKR1,615mn) resulting from taking advantage of amnesty scheme offered by FBR earlier in May 2012.
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