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BR Research

HUBC – earnings slip

Published Updated

HUB Power Company Limited (PSX: HUBC) announced its financial performance for FY22 recently with a slight dip in consolidated earnings for the year – 15 percent year-on-year. The decline in earnings stemmed from lower share of profits from associates as well as higher finance cost. The company’s consolidated revenues were seen growing by 78 percent due to higher utilization of the base plant and Narowal plant overall in FY22 from 2 and 26 percent in FY21 to 12 and 46 percent respectively in FY22. On the other hand, the utilization of Laraib and China Power Hub Generation Company (CPHGC) plants were down from 63 and 72 percent in FY21 to 57 and 62 percent respectively in FY22. CPHGC utilization was low due to the outage during the year. CPHGC unit 1 returned to service in January 2022.

Gross profits were flat for HUBC in FY22, whereas the net earnings fell despite growth in other income due to 40 percent decline in share of profits from associates and joint ventures and an 8 percent rise in finance costs. The company did not pay any dividends for FY22, which was due to high fuel and commodity prices.

Hub Power Company Limited has a diversified portfolio. The power company’s Thar Energy Limited TEL and ThalNova Power Thar TNPTL plants are expected to achieve commercial operations in 1HCY22. Construction of Sindh Engro Coal Mining Company (SECMC) Phase-ll is also underway where COD is expected later this year.

Comments

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SAMIR SARDANA Aug 30, 2022 09:06pm
HUBCO OF 2021 IS OBSOLETE.ONCE THE LIGNITE IPPS START, IN TEL AND TNPTL - IT WILL BE A DIFFERENT ORGANISM.SO HUBCO WILL BE A IPP WITH FUEL FROM RFO ,HYDRO, LIGNITE AND COAL.THAT SHOULD REDUCE THE FUEL PRICE RISK BUT ONCE THE LIGNITE IPPS START,THE INCOME FROM MANAGEMENT SERVICES WILL DISAPPEAR - AS THAT WAS EARNED FROM TEL AND TNPTL FOR CONSULTINGSERVICES, BY HUBCO IN THE CONTRUCTION PERIOD WITH COAL; PRICES COOLING OFF, CHINA POWER HUB GENERATION (CPHGC) SHOULD HAVE BUMPER PROFITSIN 2022 AND AHEAD IS THIS THE TIME FOR HUBCO,TO HEDGE ITS BETS, INTO SOLAR AND WIND,AS IT CAN EASILY OFFLOAD -2-3% IN ITS ASSOCIIATES,TO FINANCE RENEWABLES? dindooohindoo
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