Lahore, May 09, 2023 (PPI-OT): The rating reflects the holding Company character of Hubco with an exclusive focus on the different dimensions of the energy sector. The Company had signed a PPA with the government for 30 years that is valid till 2027. Hubco itself is a 1,292MW RFO based power plant situated at Mouza Kund, Hub in Balochistan. With its investment in Narowal Energy Limited, Laraib Energy Limited and China Power Hub Generation Company, the total combined installed power generation capacity of Hubco was 2,921MW, which is now increased to 3,581MW.
As 660MW is added to the total installed capacity of Hubco as ThalNova Power and Thar Energy Limited achieved their respective COD on 17th Feb'23 and 1st Oct'22 respectively. The Company aims at expanding its operations in oil and gas exploration, water desalination and renewable energy through this strategic investment. HUBCO completed the acquisition of Eni's business in Pakistan, through a 50:50 joint venture company, Prime International Oil and Gas Co. During the six-month period ended on Dec 2022, the Company reported topline of PKR ~25bln (Dec'21: PKR ~ 31bln).
While the profitability of the Company significantly increased by ~40% to PKR ~15bln (Dec'21: 9bln). The increase in profit is mainly due to Dividend income from NEL and partly offset by impact of higher finance costs due to higher interest rate. Although Hubco has a sizeable amount of borrowings to support its working capital needs and growth opportunities. The settlement of outstanding receivables due from CPPAG under the signed MoU has further eased the burden on the Company's financial risk profile. Hubco's strong operational performance over the years coupled with its diversified investment portfolio in the power sector contributes towards to the assigned ratings.
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Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
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Lahore, Pakistan
Tel: +92-42-5869504-6
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Email: hammad.rashid@pacra.com
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