Hub Power Company Reports Decline in Earnings, Maintains Dividend Payout

Karachi: Hub Power Company Ltd (HUBC) announced its financial results for the first quarter of fiscal year 2026, revealing a decline in net profit after tax (NPAT) while maintaining a healthy dividend payout. The company reported a consolidated NPAT of PkR11.6 billion, marking a 39% decrease compared to the same period last year. This decrease aligns with market expectations and is attributed to a reduction in the company’s revenue following the termination of its base plant’s power purchase agreement last year. Despite the drop in earnings, HUBC declared an interim cash dividend of PkR5.0 per share.

Consolidated revenue for the quarter was PkR17.4 billion, a 46% decline from PkR32.0 billion in the corresponding period last year. The decrease was primarily driven by the cessation of the base plant’s operations, which took effect on October 1, 2024. Consequently, the company’s gross margins fell to 44% from 56% in the same period last year.

On a positive note, the company’s share of profit increased by 4% year-on-year to PkR10.8 billion. This growth is attributed to higher profits from the inclusion of the electric vehicle segment and a recovery in power generation from its subsidiaries.

The finance cost for the quarter decreased significantly to PkR2.5 billion, representing a 54% year-on-year decline. This reduction was driven by lower interest rates and substantial repayment of outstanding liabilities during fiscal year 2025. The company’s outstanding borrowing was reduced to PkR77.4 billion, down 47% from the previous year.

The effective tax rate for the quarter was 19%, compared to 13% in the same period last year and 18% in the fourth quarter of fiscal year 2025.

In terms of stand-alone accounts, HUBC reported an unconsolidated NPAT of PkR7.9 billion, a slight increase of 1% from the prior year. Additionally, dividend and other income for the first quarter surged 15 times year-on-year to PkR8.2 billion.

AKD Securities Limited maintained a ‘Neutral’ stance on HUBC’s stock, with a target price of PkR194 per share for June 2026 and a projected dividend yield of 6.5% for fiscal year 2026.