Karachi, February 14, 2024 – Hub Power Company Limited has revealed a robust financial performance, declaring a remarkable 15 percent growth in profit for the second quarter of fiscal year 2023-24 on a Year-on-Year (YoY) basis.
The announcement was made on Wednesday, with analysts at Arif Habib Limited providing insights into the company’s financial health.
According to the financial report, Hub Power Company achieved a profit after tax (PAT) of Rs 15.278 billion, translating to an Earnings Per Share (EPS) of Rs 11.78 during the second quarter of FY24. This represents a significant improvement compared to the same period in the previous fiscal year when the company recorded a PAT of Rs 13.30 billion, with an EPS of PKR 10.25 in 2QFY23.
The positive momentum continued for the first half of the fiscal year 2023-24, with the company’s total earnings reaching Rs 32.36 billion (EPS: PKR 24.95), marking an impressive YoY jump of 44 percent. In conjunction with the financial results, Hub Power Company also declared a cash dividend of Rs 4.00 per share for the second quarter, bringing the total dividend for 1HFY24 to Rs 9.00 per share.
During 2QFY24, the company reported a 19 percent YoY increase in net sales, reaching PKR 29,913 million. This growth was attributed to higher dispatches from the Thar Energy Limited (TEL) as compared to the same period last year and the devaluation of the Pakistani Rupee against the US Dollar. However, Hub Power Company’s plant experienced zero dispatches during the quarter due to lackluster demand from power purchasers, especially with Residual Fuel Oil (RFO) being an expensive fuel. The country’s overall power generation declined by 10% YoY in 2QFY24, while local coal-based generation surged by 89% YoY. On a quarter-on-quarter (QoQ) basis, sales declined by 11%, reflecting lower power demand from the Central Power Purchasing Agency (CPPA).
The company’s gross margins during 2QFY24 increased by 475 basis points YoY, reaching 51%. This rise was primarily attributed to the zero load factor of the Hub base plant during the quarter. Hub Power Company also recognized a share of profit from its associate and joint venture, amounting to PKR 10,565 million during 2QFY24, compared to PKR 9,986 million in 2QFY23.
However, the finance cost during 2QFY24 rose by 46% YoY to PKR 6,977 million, driven by higher interest rates and the addition of TEL’s finance cost. This indicates the challenges faced by the company in managing financial expenses amid evolving market conditions.
As Hub Power Company continues to navigate through dynamic market challenges, stakeholders and investors are closely monitoring its strategies to sustain and further enhance its financial performance in the coming quarters.
