Hubco’s profit inches up 2% to Rs5.68b

Earnings improve due to drop in operating cost, lower tax on profit

KARACHI: Hub Power Company’s (Hubco) consolidated profit improved slightly by 2% to Rs5.68 billion in first half of the current fiscal year ended December 31, 2018.

The improvement came following a notable drop in its operating cost and a lower tax on profit. The company had registered a profit of Rs5.56 billion in the same half of previous year, according to a notification sent to the Pakistan Stock Exchange (PSX) on Thursday.

Its earnings per share (EPS) came in at Rs4.67 in Jul-Dec 2018 compared to Rs4.58 in the corresponding period of previous year. Hubco’s share price fell 4.18%, or Rs1.14, and closed at Rs88.22 with trading in 3.64 million shares at the PSX.

The company managed to report a higher profit despite a massive drop of 43% in its turnover to Rs30.94 billion compared to Rs54.29 billion in Jul-Dec 2017.

Operating cost fell 14.27 percentage points to 69.58% (or Rs21.53 billion) of the turnover compared to 83.85% (or Rs45.52 billion) last year. The rate of tax on profit dropped 0.89 percentage point to 2.48% (or Rs144.58 million) compared to 3.37% (Rs194.24 million).

Topline Securities, in its report, said the half-year earnings of Hubco were “primarily driven by the rupee depreciation and lower administrative and other expenses.”

On the flipside, the finance cost increased 36% to Rs2.93 billion in the half year ended Dec 2018 compared to Rs2.15 billion in the same half of previous year.

Quarterly result

Hubco’s consolidated profit in the second quarter ended December 31, 2018 declined 15% to Rs2.55 billion (EPS Rs2.11) compared to Rs3.01 billion (EPS Rs2.52) in the same quarter of last year.

The drop came “primarily due to a rise in finance cost,” Topline Securities said. “Moreover, the company did not announce any dividend for the quarter due to liquidity crunch brought about by circular debt as well as equity requirement for upcoming projects.” 

Published in The Express Tribune, February 22^nd, 2019.

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