Corporate results: HUBCO, KAPCO announce disappointing results

Both companies record lower earnings.

KARACHI:

The Hub Power Company (Hubco) and Kot Addu Power Company (Kapco) on Tuesday reported disappointing results for the first July-December half of fiscal 2013-14 as earnings dropped due to shutdown of plants for repair and overhaul work.

Hubco’s income plunged 38% as repair work on the plant affected sales. Its profit in July-December 2013 period was  Rs2.936 billion against Rs4.740 billion it earned in the same period of the previous year. However, it announced an interim cash dividend of Rs2.50 per share.

Hubco’s revenue was down 12% to Rs77.8 billion in the comparable period.

“We believe this decline in profits is mainly due to the expenditure on one of the generators (base plant) which was down for maintenance,” Topline Securities said in a report.

That was also the reason why the company dispatched lesser energy.

During the July-Dec 2013 period, Hubco operated at load factor of 62.5% against 73.9% in the same period of the previous year. This also affected earnings, which were linked with the capacity utilisation, analyst said.

The financial cost of the company was down 40% to Rs2.1 billion on the back of resolution of circular debt earlier in the year.

The consolidated income of Hubco was relatively better at Rs3.46 billion, down 29.5%.

Kapco’s earnings fall

Kapco’s earnings for the period dropped 23% to Rs2.84 billion compared to Rs3.68 billion it earned in the six months of the previous year. It announced interim cash dividend of Rs2.75 per share.

“The company carried out major overhauls of two gas turbines and one steam turbine during the period, resulting in lower generation and higher overhaul costs,” Global Research said.

Published in The Express Tribune, February 19^th, 2014.

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