Hub Power Company Limited (PSX: HUBC) announced a massive increase in consolidated earnings with highest ever profit for FY23. The growth in earnings came from HUBC’s diversification strategy and higher share of profits from associates and JV during the year. The power company does not depend on the base plant at Hub anymore for dispatches; besides its coal investment, China Power Hub Generation Company under CPEC driving profitability since FY20, the inclusion of ThalNova Power Plant in Feb-23 and TEL in the latter part of FY23 contributed to the earnings.
Starting from the top, HUBC’s consolidated revenue growth stood at 18 percent where the rise was due to higher furnace oil prices rather than the electricity dispatches that were down by around nine percent, year-on-year in FY23.
HUBC’s bottomline was seen growing by 110 percent year-on-year, not only due to controlled expenses but also higher other income. And as mentioned, the biggest role was that of share of profits from associates that was up by more than 3.7 times, which according to Arif Habib Limited was due to a claim for property damage and business interruption as well as the addition of Eni’s business. The rise was also contributed by the currency depreciation during the year. What however impacted the bottomline was the higher finance cost – up by 144 percent year-on-year – due to higher interest rates as well as inclusion of TEL’s finance cost.