Hub Power Company Posts 93% Profit Growth in Q1 FY24

Hub Power Company (HUBC) announced its 1QFY24 result wherein the company reported a consolidated profit after tax of Rs. 18.3 billion, up 93 percent year-on-year (YoY) compared to Rs. 9.47 billion in the same period last year. Along with the result, the company announced an interim cash dividend of Rs. 5 per share. According to Topline Securities, the 1QFY24 result came slightly higher than industry expectations due to a higher share of profit from associates and JV. Share of Profit from Associate and JV jumped by 289 percent YoY to Rs. 12bn in 1QFY24. The significant increase is due to the earnings contribution from ThalNova Power Plant which started commercial operation on Feb 17, 2023, followed by higher earnings contribution from China Power Hub Generation (CPHGC) amid the rupee devaluation against the US dollar. The Share of Profit from Associate and JV declined by 18 percent QoQ, primarily due to one-off insurance claims recorded in 4QFY23. Finance cost increased by 203 percent YoY to Rs. 7 billion in 1QFY24. This is likely on the back of higher borrowings to finance the newly operational ThalNova plant and Thal Energy alongside higher short-term borrowings and higher interest rates. The effective tax rate of HUBC clocked in at 15 percent in 1QFY24 as compared to 10 percent in 1QFY23 and 8 percent in 4QFY23. The basic and diluted earnings per share attributable to owners of the holding company came in at Rs. 13.17 for the quarter, compared to Rs. 7.01 in SPLY. At the time of filing, HUBC’s scrip at the bourse was Rs. 97.4, up by 0.91 percent or Rs. 0.88 with a turnover of 7,451,549 shares on Wednesday.