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HUBC’s income shrinks by 25% YoY owing to higher operating costs

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February 15, 2022 (MLN): The Hub Power Company Limited (HUBC) on Tuesday, reported a 25% YoY decline in its half-year net profit, owing to a whopping increase in operating costs and a lower share of profit from associates and joint ventures.

This was reflected in the company’s earnings per share which went down to Rs9.41 from Rs12.6 in the corresponding period last year.

According to the financial statement issued to the bourse, HUBC’s consolidated turnover in 1HFY22 was up by a significant 73% YoY to Rs46.2 billion owing to higher dispatches and FO prices.

However, the gross margin of the company went down to 34% from 59% a year earlier, mainly due to a massive rise in the cost of sales by 2.3x YoY. The cost of sales increases along with the increased load factors and utilization of plants.

The consolidated earnings also suffered from 89% YoY decline in the share of profits from associates and joint ventures. Compared to 1HFY22, earnings from associates were Rs7.6bn versus Rs830.7 million in 1HFY22. It is pertinent to mention that CPHGC
dispatch dropped significantly in 1QFY21 due to a fire incident, which has resulted in liquidated damages and repair expense for the one-off lightning incident in July 2021.

During the period, financial charges dipped by 9% YoY due to lower short-term borrowings after receiving of 2nd settlement tranche of outstanding receivables.

Another support to the earnings came from a 75% YoY decline in taxes to Rs501.8mn compared to Rs2bn in 1HFY21.

Consolidated Profit and Loss Account for the half-year ended December 31, 2021 (Rupees in '000)

 

Dec-21

Dec-20

% Change

Turnover

                     46,267,242

                     26,791,191

72.70%

Operating costs

                  (30,459,550)

                  (10,913,332)

179.10%

Gross Profit

                     15,807,692

                     15,877,859

-0.44%

General and administration expenses

                        (457,115)

                        (752,226)

-39.23%

Other income

                           481,243

                           158,206

204.19%

Other operating expenses

                           (47,479)

                        (236,717)

-79.94%

Profit from operations

                     15,784,341

                     15,047,122

4.90%

Finance costs

                     (3,397,248)

                     (3,730,676)

-8.94%

Share of profit from associates and joint ventures-net

                           830,741

                       7,604,838

-89.08%

Profit before taxation

                     13,217,834

                     18,921,284

-30.14%

Taxation

                        (501,865)

                     (2,032,861)

-75.31%

Profit for the period

                     12,715,969

                     16,888,423

-24.71%

Basic and diluted earnings per share – in Rupees

                                  9.41

                               12.60

-25.32%

 

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Posted on: 2022-02-15T13:06:33+05:00

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