Api Power Company Limited (API) has reported a sharp increase in profitability in the fourth quarter of the last fiscal year, with a significant reduction in financial expenses helping drive earnings higher.

According to the company’s unverified financial report, Api Power earned a net profit of Rs. 96.06 crore by the end of Ashadh. This represents a 130.06% increase from the Rs. 41.75 crore recorded during the corresponding period of the previous fiscal year.

The sharp increase in profit came despite only modest growth in electricity sales revenue. The company's electricity sales revenue increased 7.06% during the review period. While revenue from its core electricity business improved, the much larger increase in net profit was supported by a substantial reduction in financial expenses.

Api Power's total profit increased by 12.19%, while its financial expenses declined by 24.13% compared with the previous fiscal year. The reduction in financing costs provided a significant boost to the company's bottom line, allowing a relatively moderate increase in electricity revenue to translate into much stronger net earnings.

The improvement in profitability was also reflected in the company's earnings per share. API's EPS increased by Rs. 8.19 to Rs. 15.06 during the review period. The higher EPS indicates a significant improvement in earnings generated for shareholders compared with the previous fiscal year.

At the end of the fourth quarter, the company's net worth per share stood at Rs. 119.51. Meanwhile, its share valuation implied a P/E ratio of 21.30 times based on the reported earnings.

Api Power has a paid-up capital of Rs. 6.37 billion, while its retained earnings stood at approximately Rs. 1.24 billion at the end of the reporting period.

The latest results highlight the importance of financing costs in Api Power's earnings performance. Electricity sales revenue increased at a relatively modest pace, but the 24.13% decline in financial expenses provided a much stronger boost to profitability.

Overall, Api Power's fourth-quarter results show a substantial improvement in earnings, with net profit more than doubling from the previous year. The key driver was not a sharp acceleration in electricity revenue, but rather the company's ability to reduce its financial burden and retain more of its operating earnings as profit.