HUBCO Reports 17% Surge in Earnings For 2QFY24

Hub Power Company Limited (HUBCO), Pakistan's leading Independent Power Producer (IPP), witnessed a remarkable increase of over 17%, reaching Rs17.18 billion in profits during the second quarter of the fiscal year 2023-24, concluding on December 31.

According to a disclosure to the Pakistan Stock Exchange (PSX) on Wednesday, the company's consolidated profit for the same period last year stood at Rs14.68 billion.

The Earnings per Share (EPS) for the reviewed period rose to Rs11.78, showcasing an improvement from Rs10.25 in the corresponding period of the previous year (SPLY).

In addition to an interim cash dividend of Rs5 per share (50%) already distributed in the first quarter, the company announced an interim cash dividend of Rs4 per share (40%) in the second quarter.

On a consolidated basis, the IPP's turnover experienced a notable uptick, surging by almost 19% to Rs29.91 billion in 2QFY24, compared to the Rs25.09 billion recorded in the prior year.

While the operating costs of HUBCO increased by nearly 8% to Rs13.16 billion in 2QFY24, compared to Rs12.23 billion in SPLY, the gross profit witnessed a significant rise of over 30% to Rs16.75 billion. This elevated the profit margin to 56% in 2QFY24, up from 51.3% in SPLY.

HUBCO also reported an impressive 93% surge in profits during 1QFY24.

In the same period, the company's other income exhibited substantial growth, showing an 82% YoY improvement, reaching Rs900.45 million in 2QFY24, compared to Rs495.18 million in SPLY.

However, HUBCO experienced a surge in the cost of finance, reaching Rs6.97 billion in 2QFY24, indicating an increase of over 46%. This escalation coincided with a significant rise in interest rates throughout the year.

Conversely, HUBCO earned Rs10.56 billion as a share of profits from associates and ventures in 2QFY24, reflecting a yearly increase of over 6%.

The effective tax rate for HUBCO in 2QFY24 stood at 15.7%, lower than the 17.5% recorded in 1QFY24.

HUBCO, with a combined installed power generation capacity of 3,581 MW, operates in various business sectors through its subsidiaries, including oil and gas, mining, and industrial operations and maintenance services.