KARACHI:
Hub Power Company (Hubco) has announced that it will further diversify its business portfolio by entering the mining sector to boost its earnings as its core business of generating electricity from expensive oil continued to weigh on its economic value. government amid the energy pricing crisis in the country.
Along with the diversification announcement, the company on Monday reported a net consolidated profit of Rs 75.29 billion for the year ended June 30, 2024, up 21.5% from Rs 62 billion in the previous year, on the back of notable profits from affiliated companies. It translated to earnings per share of Rs53.98 in FY24 compared to Rs44.37 last year.
In a notification sent to the Pakistan Stock Exchange (PSX), Hubco Company Secretary Faiza Kapadia Raffay disclosed that the company had entered into a joint venture agreement with mining company Ark Metals and its shareholders for the exploration and development of mines in Pakistan.
The implementation of the agreement is subject to the necessary regulatory approvals and consents.
The power company, however, did not share other details of the joint venture, such as the size of the project, Topline Research analyst Myesha Sohail noted in a comment, adding that details are awaited to explore the impact of the new project on Hubco.
In the financial results, Hubco’s board has proposed a final cash dividend of Rs 8.50 per share. It was in addition to the already paid interim dividend of Rs 11.50 per share for the year.
Hubco’s share price rose 5.55% or Rs 8.11 to close at Rs 154.35 on a volume of 23.21 million shares on the PSX on Monday.
Earlier, in its third quarterly report for the period ended March 31, 2024, the company announced that it had entered into a definitive agreement to acquire shares in Sindh Engro Coal Mining Company (SECMC).
Completion of this transaction is subject to the necessary corporate and regulatory approvals, consents and other conditions which are under discussion with SECMC stakeholders. “We are working on multiple renewable energy opportunities including solar and wind-solar hybrid projects. RFPs (Request for Proposals) have been launched by K-Electric and we are preparing proposals for bidding. We continue to explore opportunities in new areas of interest including of battery energy storage systems, as well as electric vehicles and their associated value chain,” the report states.
The company said it achieved higher profits in the first three quarters “primarily due to the impact of COD (commissioning of two coal-fired Thar power plants) – Thar Energy Limited and ThalNova – achieved in October 2022 and February 2023; respectively. , a higher share of profit from associates and higher revenues arising from the depreciation of the PKR (rupee) against the US dollar offset by higher finance costs due to higher interest rates.”
The company’s latest profit and loss accounts for FY24 suggest that net profit rose by 21.5% mainly on the back of an increase in revenue to Rs130.5 billion from Rs114.26 billion last year.
Share of profit from associates and joint ventures rose to a net Rs 49.36 billion compared to Rs 34.31 billion last year. Other income (mainly from the rupee-dollar exchange rate) fell to Rs 3.30 billion compared to Rs 3.58 billion last year.
Finance cost rose to Rs 26.74 billion in the year under review compared to Rs 19.32 billion last year.
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