Islamabad: The Hub Power Company (HUBC) has announced a substantial drop in its fourth quarter fiscal year 2025 earnings, with its earnings per share (EPS) plummeting by 42% year-on-year to Rs9.16. This stark decrease is attributed mainly to the termination of its base plant operations, a move that has significantly impacted the company's financial standing. Despite the annual downturn, there was an 8% quarter-on-quarter increase in EPS, aligning with market forecasts.
The company's overall profitability for the fiscal year 2025 has been reported at Rs46.1 billion with an EPS of 35.6, marking a 34% decline. This downturn is primarily due to the cessation of the base plant, which has also led to a 54% reduction in gross profits, bringing them to Rs8.4 billion for the quarter. The revision in the Narowal plant's Power Purchase Agreement (PPA) further compounded these challenges.
In a surprising move, HUBC declared a dividend of Rs10 per share for the fourth quarter, exceeding industry expectations and bringing the annual dividend to Rs15 per share. The company witnessed a 47% year-on-year decrease in its topline, now standing at Rs18.7 billion for the quarter. However, there was a 10% quarter-on-quarter improvement, driven by higher energy payments and increased utilization of the Thar plant.
Profit contributions from associates and joint ventures dropped by 25% due to a one-off adjustment made by Prime International in the previous fiscal year. Administrative expenses surged by 14% year-on-year and 135% quarter-on-quarter to Rs648 million, while other expenses declined drastically by 89% due to a previous adjustment for liquidated damages.
Finance costs for HUBC reduced by 54% year-on-year and 4% quarter-on-quarter to Rs2.8 billion, reflecting the impact of falling interest rates. The effective tax rate for the company rose to 19.9% in this quarter, compared to 17.9% last year and 18.8% in the preceding quarter, culminating in a fiscal year 2025 effective tax rate of 23.6%, up from 16.7%.
Currently, HUBC's trading metrics are at a forward price-to-earnings ratio of 3.9 for FY26E and 2.7 for FY27F, as reported by JS Global.