June 22, 2023 (MLN): Pakistan Credit Rating Agency Limited (PACRA) has maintained entity ratings of Hub Power Company Limited (PSX: HUBC) at "AA+" for the long term and "A1+" for the short term with a stable outlook forecast, a latest press release issued by PACRA showed.
The rating reflects the holding company character of HUBC with an exclusive focus on the different dimensions of the energy sector.
HUBC itself is a 1,292 Megawatt (MW) RFO-based power plant situated at Mouza Kund, Hub in Balochistan.
The company holds investment in Narowal Energy Limited, Laraib Energy Limited, China Power Hub Generation Company, Thar Energy Limited and Thal Nova Power Thar Ltd, the Group has an established footprint in the power generation sector.
Hub Power Services Limited is a wholly owned subsidiary of HUBC that provides Operation and Maintenance (O&M) services to its existing power plants.
In addition, the company holds a 49% stake in China Power Hub Operating Company (Pvt) Limited, a joint venture with China Power International Maintenance Engineering Company Limited.
Furthermore, a minority stake of 8% in Sindh Engro Coal Mining Company which is establishing a coal mining facility at Thar Prime International Oil and Gas Company.
The company aims at expanding its operations in oil & gas exploration, water desalination, and renewable energy through this strategic investment.
Generation from Hub plant generation has declined over the reporting period with 9MFY23 net electrical output recorded at 205GWh (9MFY22: 863 GWh) with a load factor of 2.6%.
The fall in generation represents lower demand from Central Power Purchasing Agency (CPPA-G) as a result of governments’ increasing preference for most cost-effective power generation options.
During 9MFY23, the company reported revenue of Rs35.07 billion (9MFY22: Rs41.84bn) against energy and capacity invoices.
The company’s profitability is supplemented by dividends from subsidiaries and income from management services provided to TEL and TNPTL accumulating to Rs10.34bn for the nine-month period ended on March 2023.
HUBC’s strong operational performance over the years coupled with its diversified investment portfolio in the power sector contributes towards the assigned ratings.
Copyright Mettis Link News
Posted on: 2023-06-22T11:00:53+05:00
