KARACHI, October 30 2024: Hub Power Company (HUBC) has released its financial results for the first quarter of FY25, showcasing earnings per share (EPS) of Rs14.74, which reflects a 12% increase year-on-year, although it represents a 7% decline compared to the previous quarter. The net earnings for the quarter stood at Rs19 billion, aligning with market expectations despite ongoing challenges in the energy sector.
Key Highlights:
- Dividend Declaration: In a notable shift, HUBC did not declare a dividend for this quarter, disappointing industry analysts who had anticipated some form of payout. This decision may be linked to the early expiration of base plants and a strategic focus on expansion initiatives.
- Revenue Performance: The company reported a topline revenue of Rs32 billion, which is a 5% decrease year-on-year and a 9% decline quarter-on-quarter. This downturn is largely attributed to reduced load factors at key facilities, including the Narowal plant, China Hub Power Generation (CPHGC), and Thar Energy Limited (TEL).
- Profit from Associates and Joint Ventures: HUBC’s profits from associates and joint ventures saw a significant drop, falling 14% year-on-year and 29% quarter-on-quarter. This decline was influenced by the appreciation of the Pakistani rupee against the dollar and a high base effect from the previous year, particularly regarding contributions from CPHGC and ThalNova Power.
- Surge in Other Income: A noteworthy highlight was the surge in other income, which jumped by 265% year-on-year to reach Rs1 billion. This boost indicates effective management in diversifying revenue streams.
- Reduction in Finance Costs: Finance costs saw a significant decrease of 23% year-on-year and 10% quarter-on-quarter, amounting to Rs5.4 billion. This reduction is primarily due to lower interest expenses on long-term loans, benefiting from decreasing interest rates.
- Improvement in Trade Debts: The company’s trade debts improved markedly, declining from Rs62.9 billion in June 2024 to Rs36.5 billion in September 2024. This improvement in cash flows has allowed HUBC to extend a long-term loan of Rs23 billion to a subsidiary, details of which are yet to be disclosed.
- Cash Position Strengthening: On a consolidated basis, HUBC’s cash and cash equivalents rose from Rs29.1 billion to Rs45.6 billion. This increase is a result of improved recovery in the Independent Power Producers (IPPs) segment, alongside a reduction in trade debts from Rs99.7 billion in June 2024 to Rs79.9 billion in September 2024.
Conclusion
Overall, while HUBC navigates a challenging operational landscape, its strategic focus on managing costs, enhancing cash flows, and addressing financial structures positions the company for potential growth. Investors will be keen to observe how HUBC adapts to these challenges and leverages opportunities for expansion in the upcoming quarters.
