Hub Power Company Limited Reports Nearly Doubled Profits in 1QFY24

Hub Power Company Limited

In a remarkable financial performance, Hub Power Company Limited (PSX: HUBC) has announced nearly double the profits for the first quarter of fiscal year 2023-24, positioning itself as a standout in the energy sector. The company’s after-tax profits surged to Rs18.32 billion [EPS: Rs13.17], an impressive jump from the Rs9.47 billion [EPS: Rs7.01] reported during the same period last year (SPLY).

The results, made public on Thursday, also included the declaration of an interim cash dividend for the first quarter ended September 30, 2023, at an impressive rate of Rs5 per share, representing a 50% dividend yield.

Hub Power’s turnover for the first quarter showed remarkable growth, expanding by 13.99% YoY to reach Rs33.73 billion, as compared to Rs29.59 billion in the same period in the previous fiscal year.

One of the key contributors to this surge in profits was the substantial reduction in operating costs, which decreased by 14.47% YoY. This reduction led to a remarkable improvement in gross profit, which saw a significant 72.15% YoY increase to reach Rs16.74 billion in 1QFY24.

However, the company did experience a decrease in other income, which shrunk by 31.88% YoY, settling at Rs280.85 million during the first quarter of the current fiscal year, compared to Rs412.28 million in SPLY.

On the expense side, the company saw an increase in general and administration expenses by 22.80% YoY, and other operating expenses surged by a substantial 4.6 times (4.6x) YoY, reaching Rs345.91 million and Rs150.14 million, respectively, during the review period.

The company’s finance costs also experienced a significant increase, soaring by 3.03 times (3.03x) YoY, totaling Rs7.07 billion in 1QFY24, as compared to Rs2.33 billion in 1QFY23. The surge in finance costs was primarily attributed to higher interest rates.

On the tax front, Hub Power Company paid a higher tax worth Rs3.21 billion, a significant increase compared to the Rs1.1 billion paid in the corresponding period of the previous year, depicting an increase of 2.91 times (2.91x) YoY.

The financial performance for the quarter ended September 30, 2023, as per the consolidated (un-audited) financial results, is as follows:

  • Turnover: Rs33,729,891 (13.99% increase YoY)
  • Operating Costs: Rs16,993,732 (-14.47% decrease YoY)
  • Gross Profit: Rs16,736,159 (72.15% increase YoY)
  • General and Administration Expenses: Rs345,909 (22.80% increase YoY)
  • Share of Profit from Associates and Joint Venture – Net: Rs12,034,539 (289.32% increase YoY)
  • Insurance Claim Against Alternator Damage and Consequent Loss of Revenue: Rs38,122
  • Other Income: Rs280,850 (-31.88% decrease YoY)
  • Other Expenses: Rs150,137 (360.03% increase YoY)
  • Finance Cost: Rs7,068,648 (202.84% increase YoY)
  • Profit Before Taxation: Rs21,524,976 (103.51% increase YoY)
  • Taxation: Rs3,206,520 (190.67% increase YoY)
  • Net Profit for the Period: Rs18,318,456 (93.36% increase YoY)
  • Basic Earnings Per Share: Rs13.17 (EPS: Rs7.01 in SPLY)

The outstanding financial performance of Hub Power Company Limited in the first quarter of the fiscal year 2023-24 reflects its commitment to achieving sustainable growth and delivering value to its shareholders. The company’s ability to nearly double its profits in the current economic environment is a testament to its strong business strategy and operational efficiency.

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