Hub Power Company Limited (HUBC) declared its 9MFY2020 financial results where it posted a net profit of Rs. 18.2billion (Earnings Per Share: Rs. 14.1), marking a 110% increase from last year.
3QFY20 consolidated Net profit stood at Rs. 7.2 billion (Earnings Per Share: Rs 5.55), up by 120%YoY and 31% from last quarter.
The increase in profit is due to the commencement of HUBCO’s 1,320 Mega Watt plants in August-2019, which operated at an average 40% during the quarter, and contributed Rs. 3.8 billion to HUBCO’s Consolidated Profit. However, higher finance cost (which increased by 55%) kept Profit Growth limited.
During the quarter, Hub Power Furnance Oil Plant and Narowal plant load factors witnessed a significant decline. The decline is primarily due to low priority in National Grid and lower electricity demand.
Hub Power Co didn’t announce cash dividend along with its result due to increased liquidity requirements and higher debt levels on its balance sheet. Analysts believe that Dividend Payout may resume From Jan-2021 onwards as it expects Capacity Payments which will bring its leverage position to lower levels.
Expansion into coal-based power generation along with improving the ranking of base and narowal plant in merit list would further improve HUBCO’s prospects
About HUBCO’s Coal Projects
China Power Hub Generation Company is a 1,320MW imported coal-fired power plants of Ultra super-critical technology, situated at Hub, Balochistan. The project is a subsidiary of Hub Power Company Ltd and includes captive barge jetty with coal trans-shipment capacity of 4.2 Million Tons Per Annum. The project started its commercial operations from August-2019 and has an estimated cost of US$2bn with Debt to Equity ratio of 75:25 with dollar-based IRR of 17%.
|Rupees in Million||9MFY20||9MFY19||Change|
|Share of profit/(loss)||8,960||321||2691%|
|Transfer of stake||1,009||–|
|Earnings Per Share||14.07||6.61||113%|