Hub Power Company Limited (PSX: HUBC) had seen its earnings slide in FY17 even though the consolidated revenues of the firm saw an increase of over 10 percent, year-on-year.

This was due to increases in operating cost due to higher repair and maintenance expenditure on major overhauling at Hub Plant and 36,000 running hours’ major maintenance of six engines at Narowal Plant, along with losses from some of the projects under construction.

Earnings of the IPP were lower by three percent in 1QFY18 as well, emanating again form higher than expected increase in operating costs. However, the decline was restricted as finance cost, which accounts for around 4 percent of total sales depicted flat growth in QFY18.

The higher operating expense can also be seen in HUBC’s standalone profit and loss statement, which indicates that these costs came from the base plant at Hub.

These increased costs could be due to O&M charges or other expenses like higher furnace oil prices. However, these increases in operating costs were not expected by the market especially when the firm completed the overhaul of Hub Plant in FY17.

In HUBC’s unconsolidated P&L, the other income saw a significant increase, which according to the market source could be due to the dividends from the Narowal Plant. Narowal was de-merged as a separate entity from 4QFY17 onwards from HUBC