Karachi: Hub Power Company Ltd (HUBC) announced a surprising final cash dividend of PkR10 per share despite a significant drop in profitability for the fourth quarter of FY25. The company's consolidated Net Profit After Tax (NPAT) fell by 43% year-on-year, totaling PkR11.8 billion, aligning with market anticipations.
Throughout FY25, HUBC's consolidated Profit After Tax (PAT) amounted to PkR46 billion, with an Earnings Per Share (EPS) of PkR35.56. The total annual dividend payout was PkR15 per share, marking a 25% year-on-year decline.
The company's revenue for the quarter experienced a sharp contraction, clocking in at PkR18.8 billion, a 47% decrease compared to the same period last year. This reduction was primarily attributed to the termination of the base plant's Power Purchase Agreement (PPA) effective from October 1st, 2024. Consequently, HUBC's gross margins stood at 45%, down from 53% in the corresponding period last year.
The annual drop in revenue was largely driven by lower income following the termination and renegotiation of the PPA of the base plant and NEL, coupled with a decrease in profit share during the period. The share of profit from associates was recorded at PkR11.0 billion, a 25% year-on-year decrease. The previous year's figures had seen a spike due to the revelation of fair-value adjustments of Prime Oil and Gas’s assets.
Finance costs for the quarter were significantly reduced to PkR2.8 billion, a 54% decrease year-on-year, driven by declining interest rates and the substantial repayment of outstanding debts. The effective tax rate for the quarter was steady at 18%.
In terms of stand-alone accounts, the unconsolidated NPAT for the final quarter stood at PkR513 million, representing a 96% year-on-year decrease. This brought the full-year earnings to PkR19.1 billion. Meanwhile, dividend and other income for the final quarter dropped to PkR1.1 billion, an 84% decline year-on-year, with the full-year figure reaching PkR15.5 billion, a 7% decrease.
The company's stock is currently under review, indicating potential adjustments moving forward.