Hub Power Company profit plunged down by 30%

Hub Power Company (Hubco) – 30.2% drop in the net profit for fiscal year 2013-14 from previous year as it operations went below actual potential due to the on-going overhaul of plants’ boilers.
According to a notice published on the Karachi Stock Exchange website, Hubco, the biggest private power supplier in Pakistan, revealed that its profit for 2013-14 was Rs6.549 billion against Rs9.387 it posted in 2012-13.
A final cash dividend of Rs4 per share was posted, in addition to Rs2.5 per share already reported earlier in the year.
Sales dropped down 2% to Rs161.81 billion whereas gross profit plunged down 28% to Rs11.7 billion reflecting the effect of less power generation on the company’s revenue.
“Company’s load factor for base plant stood at 67.4% versus 72.4% in the same period of last year. However, load factor of its Narowal plant stood at 83.3% as against 45.1% in fiscal 2013,” Vahaj Ahmed, analyst, mentioned in his report.
Hubco is also the owner of Narowal plant in Punjab, holding a capacity of 225 Megawatts (MW) and another 84MW-hydroelectric project in Azad Kashmir.
The overhaul work required Hubco to cut down on production, which did not work in its favor. The four power units with 325MW capacity each (1300MW total) are functioning at a lower load factor.
The overhaul work is expected to be completed by the end of May 2015, CEO Khalid Mansoor informed. “The work on two of the boilers has already been completed but all four of them have been working.”
Overhaul of the third boiler is estimated to start by November 2014 and completed by January 2015, he told.
The company has been doing the overhaul work of the boilers of its four power plants since a several months, with the aim of increasing productivity in the long run.
It is estimated that the repair of the boilers was required since a long time but had been overlooked by the old sponsors in order to save themselves from the investment. Hubco had been sold to foreign investors to the Dawood Group in 2012.