Hub Power Company Limited (HUBC) Q3 FY24 earnings preview
AKD Research has just released an update on Hub Power Company Limited’s previous quarter’s financial results. Here are the important points from their Q3 earnings preview.
Solid Growth Expected in NPAT
Hub Power Company Limited (HUBC) is anticipated to report a Net Profit After Tax (NPAT) of PkR16.1 billion, equivalent to earnings per share (EPS) of PkR12.42, for the third quarter of FY24. This represents a significant increase of 5% quarter-on-quarter (QoQ) and an impressive 43% year-on-year (YoY) growth.
Factors Driving Earnings Growth
The boost in earnings is primarily attributed to higher gross margins, stemming from the non-utilization of fuel oil-based plants, namely Narowal and HUBCO-base. During Q3FY24, these plants recorded minimal utilization, with Hubco Base generating 0 Gwh of electricity.
Power Generation Profile
The generation profile of Hub Power Company’s power plants during the quarter showed mixed performance, with some plants experiencing fluctuations in electricity generation compared to the previous quarter.
Despite the unchanged generation profile of the company as a whole, with total HUBC utilization at 8.6% during Q3FY24, revenues are expected to remain stable at PkR29.4 billion, showing a slight decline of 2% QoQ but an increase of 8% YoY.
Non-operating Gains
On the non-operating front, the Share of Profit from associates is projected to reach PkR10.8 billion, marking a 2% increase QoQ and an impressive 66% surge YoY during the outgoing period.
Dividend Outlook
Investors can anticipate an interim dividend of PkR4.0 per share for the quarter, leading to a total payout of PkR13.0 per share during the first nine months of FY24, compared to PkR24 per share in the same period last year.
Conclusion and Recommendation
Overall, Hub Power Company Limited remains a top pick within the power generation sector. With a target price of PkR160 per share by December 2024, investors can also look forward to promising dividend yields of 14% for FY24 and 21% for FY25, respectively.
| Financial Metric | 3QFY24E (PKRmn) | 2QFY24A (PKRmn) | QoQ (%) | 3QFY23A (PKRmn) | YoY (%) | 9MFY24E (PKRmn) | 9MFY23A (PKRmn) | YoY (%) |
|---|---|---|---|---|---|---|---|---|
| Net Sales | 29,395 | 29,913 | -2% | 27,231 | 8% | 93,038 | 81,918 | 14% |
| Gross Profit | 17,034 | 16,751 | 2% | 13,133 | 30% | 50,522 | 35,718 | 41% |
| Opex | 393 | 692 | -43% | 342 | 15% | 1,431 | 975 | 47% |
| Finance Cost | 7,449 | 6,977 | 7% | 4,721 | 58% | 21,495 | 11,845 | 81% |
| Share of Profit | 10,753 | 10,565 | 2% | 6,476 | 66% | 33,353 | 19,553 | 71% |
| PAT less NCI | 16,111 | 15,278 | 5% | 11,249 | 43% | 48,471 | 33,647 | 44% |
| EPS – Consol. | 12.42 | 11.78 | 5% | 8.67 | 43% | 37.37 | 25.94 | 44% |
| EPS – Unconsol. | 4.00 | 8.38 | -52% | 4.6 | -12% | 15.51 | 16.71 | -7% |
| DPS | 4.00 | 4.00 | 0% | 6.00 | – | 13.00 | 24.0 | -46% |
Disclaimer:
The information in this article is based on research by AKD Research. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.
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