HUBC’s profitability weakens by 9% in 1QFY22

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MG News | October 29, 2021 at 01:46 PM GMT+05:00

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October 29, 2021 (MLN):  Hub Power Company Limited (HUBC), one of the first and largest independent power producers (IPP) of Pakistan, witnessed a 9% YoY decline in its consolidated net profits that stood at Rs7.70 billion (EPS: Rs5.72) during the first quarter ended September 30, 2021, against the net profits of Rs8.44bn (EPS: Rs6.28) earned in the same period last fiscal year.

This fall in profitability was mainly due to the higher operating expenses that led margins to plunge by 22ppt to 30% during 1QFY22.

On a consolidated basis, HUBC achieved a turnover of Rs26.34bn which is nearly 67% higher on the back of higher dispatches from both Narowal and HUBC’s base plant but, Laraib (Hydropower plant) operated at a weak load factor, a research note by Intermarket Securities said.

However, the gross margins of the company contracted from 52% to 30% in 1QFY22 due to an over two-fold jump in operating cost.

A reduction in general and administrative expenses by 42% YoY, a 12.8% YoY drop in finance cost amid a lower interest rate regime and an increase in other income by 3.77 times YoY supported the bottom-line.

More notably, the share of profit from associates clocked in at Rs2.29bn, down by 34% as opposed to Rs3.48bn earned in the same period last year.

Consolidated Profit and Loss Account for the quarter ended September 30th, 2021 (Rupees in '000)

 

Sep-21

Sep-20

% Change

Turnover

 26,339,723

 15,794,082

66.77%

Operating costs

 (18,541,407)

 (7,654,849)

142.22%

Gross Profit

 7,798,316

 8,139,233

-4.19%

General and administration expenses

 (224,035)

 (386,061)

-41.97%

Other income

 216,842

 57,409

277.71%

Other operating expenses

 (23,090)

 (12,654)

82.47%

Profit from operations

 7,768,033

 7,797,927

-0.38%

Finance costs

 (1,659,737)

 (1,904,114)

-12.83%

Share of profit from associates and joint ventures-net

 2,292,650

 3,482,171

-34.16%

Profit before taxation

 8,400,946

 9,375,984

-10.40%

Taxation

 (705,440)

 (934,682)

-24.53%

Profit for the period

 7,695,506

 8,441,302

-8.84%

Basic and diluted earnings per share - in Rupees

 5.72

 6.28

-8.92%

 

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