Hub Power Company Posts 44% Profit Growth in First Half of FY24

The Hub Power Company Limited (HUBC) announced its 2QFY24 financial result today where the company posted a profit after tax (PAT) of Rs. 15.27 billion, up by 15 percent YoY compared to Rs. 13.29 billion in 2QFY23. This takes the total earnings for 1HFY24 to Rs. 32.36 billion, up by 44 percent YoY. Along with the result, the company also announced a cash dividend of Rs. 4 per share . During 2QFY24, net sales witnessed an increase of 19 percent YoY to Rs. 29.9 billion due to higher dispatches from TEL as compared to SPLY and the devaluation of PKR against USD, according to Arif Habib Limited. Also during 2QFY24, the dispatches from the HUBC plant remained zero on the back of lackluster demand from power purchasers, amid RFO being an expensive fuel. It is pertinent to note that in 2QFY24, the overall country power generation plunged by 10 percent YoY while local coal-based generation surged by 89 percent YoY. On a QoQ basis, sales declined by 11%, amid lower power demand from CPPA. During 2QFY24, the company’s gross margins increased by 475 bps YoY to 51 percent. The rise in margins was mainly attributable to the zero load factor of the Hub base plant during the quarter. The company recognized a share of profit from associate and joint ventures of Rs. 10.5 billion during 2QFY24 compared to Rs.  9.9 billion during 2QFY23. The finance cost during 2QFY24 rose by 46 percent YoY to Rs. 6.9 billion due to higher interest rates and the addition of TEL’s finance cost. HUBC posted earnings per share (EPS) of Rs. 11.78 in 2QFY24 and an EPS of Rs. 24.95 in 1HFY24. At the time of filing, the company’s scrip at the bourse was Rs. 114, down 0.78 percent or Rs. 0.9 with a turnover of 5.7 million on Wednesday.