THE HUB POWER COMPANY LIMITED

S.KAMAL HAYDER KAMI.
Research Analyst
, PAGE
July 14 - 20, 2008

The Hub Power Company Limited (HUBCO) is the first and largest company to be financed by the private sector in South Asia and one of the largest private power projects in the newly industrialized world. The shares of the HUBCO are listed on the Karachi, Lahore and Islamabad Stock Exchanges and its global depository receipts are listed on the Luxembourg stock exchange.

The principal activities of HUBCO are to own, operate and maintain an oil-fired power station with four generating units with an installed net capacity of 1,200 MW in Tehsil Hub, District Lasbella in Balochistan and to carry out the business of power generation, distribution and sale at other places in Pakistan. The Hub power station was the first project to be successfully co-financed by several governments, the World Bank as well as international private sector lenders and investors. The Company provides employees with frequent opportunities for training and skill development, both within the country and internationally. The Company's objective is to meet the increasing demand for power in the country.

Currently, the government has given approval to the HUBCO for setting up a combined cycle power plant based on Reciprocating Engines Technology with an investment of about US$ 300 million and having an ISO installed capacity of 225 MW. This Plant is being set up in District Narowal, Punjab and will start supplying electricity to the National Grid from end March 2010. The Narowal Plant is powered by 11 of the largest, 18 cylinders and V configuration versions of the most powerful four-stroke engine. The engines will burn Residual fuel oil (RFO) and will operate in a combined cycle arrangement with a total net electrical capacity of 213.60 MW at site condition. The output of the 11 generators sets is complemented by a steam turbine generator driven by steam produced from the engine exhaust gases. The Hub Power plant can provide 10+ percent of country's electricity demand. The Plant achieved a thermal efficiency of 37.6 percent with an availability of 85.9 percent during the financial year 2001-2002. A microprocessor control system (DCS) is used to control and monitor the performance throughout the plant.

OPERATIONS

HUBCO continues to maintain an excellent relationship with WAPDA. The company is managing the power plant as per the best utility practices and manufacturers recommendations and continues to allocate funds on various betterment expenditures towards the mobilization of its power plant in order to ensure the plan's long term integrity and maximum availability for their customer WAPDA.

FINANCIAL HIGHLIGHTS

INDICATORS

3-MAR-08 Rs (000)

3-MAR-07 Rs (000)

Turn Over

15,965,201

10,227,976

Gross profit

1,167,752

1,122,761

Profit

651,721

775,236

The Financial Highlights of the HUBCO examines the key business structure , operations, and turnover. From Mar FY07 to FY08 the turnover was increased by 56 percent during one year. The company's Gross profit was increased by 40 percent over one year. The profit for the period was decreased by 16 percent from Mar FY07 to FY08.

INDICATORS

GROWTH IN MAR-08

Current Ratio

1.18

Quick Test

1.0

Fixed Assets Turnover

0.50

Total Assets Turnover

0.30

Return on Assets

3.83%

Return on Equity

57.30%

The Current ratio of the HUBCO Company was recorded 1.18 during 1QFY08, which shows the good performance of the company. The company has been efficient enough in paying off debt as compared to its competitors and has paid off its liabilities. The Fixed assets turnover 0.50 and Total assets turnover 0.30 were recorded in 1Q08 respectively. The Return on assets (ROA) 3.83 percent & Return on Equity (ROE) 57.30 percent increased during 1Q08, both returns also show the good performance of the company.

HUBCO IN KARACHI STOCK EXCHANGE

HUB POWER COMPANY LIMITED

START & END

MONTHS

.

MARCH

APRIL

MAY

JUNE

JULY

Opening rate of Start Month

32.70

31.95

32.00

31.61

28.60

Closing Rate of End Month

31.85

32.70

31.30

28.88

27.49

The Statistical data shows the performance of the company in KSE. In March FY08 the Hubco's rate decreased by 2.7 percent; it was started from 32.70 and to close at 31.85. In April the company's rates slightly increased from 31.95 to 32.70 by 2.3 percent. In May, the rates went down 2.2 percent; the rate was started from 32.00 and to close at 31.30. In Jun the Hub power lost 9.4 percent from 31.61 to 28.88 and the performance level of HUBCO Company was very poor in the month of Jun. Recently, in this month of July the opening rate was 28.60 and on seventh July the closing rate was 27.49 so it was decreased by 4 percent in the first week of July.

OVERVIEW

Without any doubt, HUBCO is one of the key producers of the energy. Today the energy is important for agriculture inputs like water and soil. HUBCO provides energy through WAPDA for agriculture growth. The government has given approval to the HUBCO with an investment of about US$ 300m and having an ISO installed capacity of 225 MW which is a good sign for the company performance. This Plant is being set up in District Narowal, Punjab and will start supplying electricity to the National Grid from end Mar 2010.