Corporate Briefing Notes
The Hub Power Company Limited (HUBC) organized a corporate briefing session today and discussed the financial performance and future outlook of the Company.
The key takeaways from the meeting are as follows:
● With a total power capacity of 3,581 MW, the Company reduced the reliance on imported coal which helped significantly reduce the total cost and save the foreign exchange.
● As a major breakthrough, the Company successfully achieved the COD for all the three Thar-based projects in the period under review.
● The Thar Energy Limited project (330 MW) and The Nova project (330MW) are expected to rank among the top five in merit order.
● With 60% share in the Thar Energy project and 38.3% in Thal Nova project, the Company expects an ROE of 30.65% from these projects. The COD was achieved in October 2022.
● For SECMC, HUBC successfully achieved COD for Phase II that will double the mining capacity from 3.8 MTPA to 7.2 MTPA. Currently, the Company holds 8% stake in this joint venture.
● Besides, the Company informed about diversifying their portfolio made possible with the acquisition of ENI Pakistan’ E&P Business which will reduce the coal prices and increased reliance on indigenous energy sources.
● China Power Hub Generation Company (CPHGC) project was completed in February, 2023 followed by the release of the $150 million Standby Letter of credit (SBLC). With 46% stake, HUBC expects an ROE of 27.2% as per upfront tariff.
● Due to the transformer failure in July, 2021 at CPHGC, the availability was reduced from 85% to 45%. However, it was resumed in January, 2022.
● Company management also informed about the insurance claims of $65 million against the transformer damage.
● The consolidated performance of the Company remained solid with revenue growth of 18%, gross profit by 43%, EBITDA by 41%. Net profit by 43% and EPS of 84%.
● Company attributed the higher profit to the CPHGC due to devaluation and insurance claims. On the other hand, the higher finance cost was due to the higher interest rates and depreciation of PKR.
HUBC management also discussed the future strategy and prospects that have been
● HUBC is looking forward to participating in the bidding process after the Sindh government announcement for the wastewater recycling project.
● To diversify their portfolio, the Company is likely to further explore and evaluate the opportunities and prospects for the Electric Vehicles in Pakistan after the market is back on track.
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