Hubco reports 28% YoY profit decline in 1HFY25

KARACHI: The Hub Power Company Limited (Hubco) announced its financial results for the first half of fiscal year 2025 (1HFY25), reporting a net profit of Rs23.3 billion (EPS: Rs17.99), marking a 28 per cent decline compared to Rs32.4 billion (EPS: Rs24.95) in the same period last year.

For the second quarter (2QFY25), the company posted earnings of Rs4.2 billion (EPS: Rs3.25), reflecting a sharp 72 per cent YoY decrease and a 78 per cent QoQ drop. Despite the decline, the company declared a cash dividend of Rs5 per share.

The company’s revenue for 1HFY25 stood at Rs47.5 billion, down 25 per cent YoY, primarily due to the termination of the Power Purchase Agreement (PPA) for the Hub base plant. In 2QFY25, sales fell even more sharply by 48 per cent YoY and 52 per cent QoQ, driven by the same factor.

Other expenses surged to Rs3.6 billion in 2QFY25, a 22-fold increase from the previous year, mainly due to provisions for the Late Payment Surcharge (LPS) disallowance related to the Narowal plant. The company also recorded distribution expenses of Rs496 million in 1HFY25, a cost that was absent in the previous year.

The share of profit from associates declined by 11 per cent YoY to Rs20.2 billion in 1HFY25, primarily due to lower contributions from Prime International. However, finance costs decreased by 32 per cent YoY to Rs9.6 billion, supported by lower interest rates. The effective tax rate surged to 38.7 per cent in 2QFY25, compared to 15.7 per cent in 2QFY24, requiring further clarification from the company.

According to Arif Habib Lt, despite short-term pressures, Hubco remains a key player in Pakistan’s power sector, navigating challenges with strategic adjustments.