HUBC: Earnings rise as business mix shifts

Hub Power Company Limited (PSX: HUBC) closed FY26 with higher consolidated earnings despite a visible weakening in its core revenue and gross-profit lines. The result highlights how the group’s earnings base is gradually shifting away from direct power-generation turnover towards associates, joint ventures, and a broader portfolio of investments.

Consolidated revenue fell by 15 percent year-on-year. Cost of revenue (operating cost) declined by a relatively modest 5 percent year-on-year. As a result, gross profit dropped 25 percent, while the gross margin narrowed to 41.7 percent from 47.8 percent in FY25.

The decline reflects, among other factors, the impact of the early termination of the Hub Plant’s Power Purchase Agreement. As a result, the company’s historical turnover is becoming a less complete measure of the group’s overall performance. And this has been a trend over the last few years.

Operating profitability received some support from other income in FY26, which jumped 84 percent year-on-year, while other operating expenses dropped sharply by around 75 percent during the year.

The real earnings support came below the operating line. HUBC’s share of profit from associates and joint ventures increased by 10 percent and accounted for almost 65 percent of the total profit before levy and taxation from continuing operations.

Finance costs also fell 40 percent, reflecting lower interest rates and the continued repayment of project-related borrowings. These two movements more than compensated for the decline in gross profit, lifting profit before levy and taxation.

After taxation and thefinal-tax levy, total consolidated profit for HUBC in FY26 was up by 9 percent year-on-year. Of this, 88 percent was attributable to HUBC’s shareholders.

Operationally, the power portfolio had a stronger year. HUBC’s subsidiaries and associates collectively supplied 5,363 GWh to the national grid, around 21 percent more than the previous year. Generation from China Power Hub Generation Company rose particularly strongly, while Narowal’s output also recovered.

The two Thar-based plants remained the largest contributors, together generating 3,646 GWh.

HUBC’s earnings story is increasingly about diversification. Its portfolio now stretches across Thar coal mining and generation, oil and gas exploration, mineral development, BYD-backed new-energy vehicles and charging infrastructure.

The board announced a final cash dividend of Rs5 per share, taking the full-year payout to Rs20 per share, compared with Rs15 in FY25. Overall, FY26 was not a year of turnover growth, but it showed HUBC’s continued growth of its increasingly diversified portfolio.