AKD Securities Limited - Off the Analyst's Desk.

Karachi -- October 27, 2022 (PPI-OT)

HUBC: 1QFY23 Result Review

Hub Power Company Ltd (HUBC) announced the result for 1QFY23 today, where the consolidated NPAT attributable clocked in at PkR9.1bn (EPS: PkR7.0), in line with our estimates and up 23%YoY/30%QoQ.

The company has recorded a revenue of PkR29.6bn, decreasing by 8%QoQ owing to lesser utilization of the Hub plant in this quarter while the generation from Narowal and Laraib plants remained flat.

Despite the lower revenue, gross profit has risen by 12%QoQ and 25%YoY to clock in at PkR9.7bn due to the low efficiency of the Hub plant. To emphasize, margins for the company have increased from 27% in 4QFY22 to 33% in the first quarter of the year.

Share of profit from associates has decreased by 27%QoQ, according to our expectations. CPHGC remained cash-strapped in the quarter and hence was not operational for significant periods as it could not import coal. The profit received from CPHGC and SECMC remains a key driver for earnings, contributing ~34% of total...