HUBCO’s Earnings Increased By 23%
HUBCO’s Earnings Increased By 23%: Hub Power Company Limited’s (Hubco) consolidated profit increased 23% to Rs.3.12 billion for the quarter ended September 30, 2018 mainly due to a massive drop in operating costs and lower taxes.
The profit stood at Rs.2.55 billion in the same quarter last year, according to the profit or loss account of the firm sent to the Pakistan Stock Exchange (PSX) on Friday.
Earnings per share improved to Rs.2.56 in the quarter compared to Rs.2.06 in the corresponding quarter last year. Hubco’s share price dropped 2.49%, or Rs2.23, and closed at Rs87.24 with 1.94 million shares changing hands at the PSX.
According to the firm’s account available, the operating cost fell a massive 43% despite a 34% decline in sales.
Sales stood at Rs17.94 billion in the quarter compared to Rs27.33 billion in the same quarter last year. The operating cost, however, came down to Rs13.10 billion compared to Rs23.16 billion.
The government charged 2% (Rs66.71 million) tax on profit in the quarter against 4.6% (Rs122.120 million) tax in the same quarter last year.
Taurus Securities said in a post-result comment that the growth in profit is seen mainly due to rupee depreciation against the dollar in the quarter under review.
The sales dropped due to lower power generation. “Total power generation plummeted by 67.8% on year-on-year (YoY) basis and 56.4% on quarter-on-quarter basis due to lower generation from furnace,” it said.
Base plant generation dropped significantly by 80.7% YoY basis due to aforesaid reason. However, average devaluation of 17.5% year-on-year of rupee against US dollar supported the growth of gross profit by 15.8% to Rs4.8 billion in the quarter.
General and administrative expenses also reduced to Rs313.50 million compared to Rs437.53 million.
Also, the other income improved to Rs50.93 million compared to Rs33.79 million.
On the flip side, the finance cost surged to Rs1.32 billion compared to Rs1.01 billion. And share of loss from associates increased to Rs60.75 million compared to Rs44.62 million.“In a negative surprise, the company skipped the dividend payout indicating liquidity concerns amid piling up receivables,” the brokerage house said.
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