KARACHI: Hubco’s earnings grew 12.7 per cent to Rs1.24 for the third quarter of the fiscal year 2010 over the same period last year.
Hub Power Company (Hubco) is the country’s second-largest private power producer. The higher growth in earnings and profit is primarily due to the increase in the amount of interest that they stand to gain from the Water and Power Development Authority (Wapda) because of the money that is owed and overdue. Hubco’s growth in the period ended March 31 was also helped by their production increasing and the rupee devaluing eight per cent this quarter against the dollar over the same period last year. Increasing prices of furnace oil should increase the revenue of the company despite the circular dept badly affecting the company’s liquidity, said BMA Capital analyst, Nurali Barkatali.
Hubco, earned a net profit of 1.26 billion rupees ($15 million) in the same period last year. The overdue amount owed by Wapda to Hubco may be from Rs39 to Rs42 billion during the nine months of the fiscal year 2010, according to Topline analyst, Furqan Punjani. They base this on the fact that Wapda’s overdue payment to Hubco stood at Rs37 billion in December 2009 and that this amount carries a discount rate of two per cent per annum compounded semi-annually.
Their current stock rate is Rs35.17, their price decreased by Rs0.03 today, a percentage decrease of 0.09 per cent. The Hub Power Company’s principal activities are the owning, operation and maintenance of an oil-fired power plant with a net capacity of 1,200 megawatt located at the Hub River estuary in Balochistan. It also generates power and sells it to other places in Pakistan.