HUBC - 3QFY23 Result Review, (AKD Off the Analyst's Desk Apr 27, 2023)
The Hub Power Company (HUBC) announced its 3QFY23 result earlier today, where the company reported earnings of PkR11.2bn (EPS: PkR8.7) for the quarter, up by 22%YoY while declining by 15% on the quarterly basis. This takes cumulative earnings for 9MFY23 to PkR33.6bn, up by 57%YoY.
- Revenue for the quarter clocked in at PkR27.2bn, up by 9%QoQ as the Narowal plant generated more power in the quarter. On the other hand, Revenue for 3QFY23 is up by 45%YoY due to hefty PkR depreciation along with the inclusion of the TEL plant in the year.
- Gross profit for the quarter has clocked in at PkR13.1bn, up by 52%YoY while remaining flat on the quarterly basis. For 9MFY23, gross margins have improved to 44% vs. the 38% recorded in SPLY, due to the lower load factor of the inefficient Hub plant.
- Share of profit from associates has increased by 55%YoY to clock in at PkR6.5bn. This is likely due to the inclusion of the ThalNova plant based on Thar coal, which generated 353GWh in the quarter. To recall, the company recorded PkR10.0bn in share of profit in 2QFY23 due to the insurance claim of the CPHGC plant, which was a one-off income.
- Finance costs for HUBC have remained flat on QoQ basis, while increasing by 1.3x YoY to clock in at PkR4.7bn for 3QFY23. This is likely on the back of finance costs from TEL amounting to ~PkR2bn, while the company also had to take on heavy borrowing to finance its investments in the ThalNova plant.
- The company has also announced a dividend of PkR2.75/sh for the quarter, in-line with our expectations. This takes cumulative payout for 9MFY23 to PkR24.0/sh, amounting to a payout ratio of 92.5%.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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