Hubco profits rise 6% in September quarter

The Hub Power Company Limited (HUBCO) is currently the largest independent power producer (IPP), generating upwards of 3,250MW through utilising a wide mix of fuels for power generation such as natural gas, coal and oil.

It achieves this through their various powers plants, including base Hub Plant in Balochistan, RFO-fired plant in Narowal, as well as a coal-based plant incorporated with a Chinese joint venture CPIH.

Additionally, Hubco holds 75 per cent controlling interest in a hydel-powered plant known as Laraib Energy Limited, owing to an increased power generation capacity.

The quarter ended September 2022 showed improvement in the consolidated earnings per share (EPS) from Rs5.72 to Rs7.01. The profits increased by a little less than 6 per cent. However, no payout was declared.

Listed at the Pakistan Stock Exchange (PSX) as HUBC, the stock has maintained a relatively range-bound position similar to its counterparts on the market.

The recent news on the letters of credit (LCs) encashment swayed some investors to gravitate towards other sectors. However, Hubco’s fundamental performance record coupled with the news on establishing the 330MW ThalNova power plant along with the withdrawal of the LCs encashment has seen positive reversal in the stock’s performance.

Considering the stock’s price hike back in October 2022 to around Rs80/share and where it now stands at around Rs62/share, the KASB Research believes the room for improvement is vivid now more than ever.

Hubco’s track record makes it a viable stock option for the long-term and given the aforementioned positive news, it has the potential to show great improvement in the coming months.

Pakistan Refinery posts profit of Rs1.63/share

Pakistan Refinery Limited (PRL) was incorporated in Pakistan as a public limited company in May 1960. The company is engaged in the production and sale of petroleum products. The company is a subsidiary of Pakistan State Oil Company (PSO).

The refinery sector has shown incredible financial performance during 2022. The profits of Pakistan’s refinery sector touched record high levels during the period, surging by over 7x to Rs24 billion. The growth in profitability was the product of a sharp increase in the gross refining margins during the fiscal year.

PRL has posted a profit of Rs1.63/share in the quarter ended September 2022, compared with the loss-after-tax of 60 paisas/ share in the comparative period of 2021.

The company made utmost efforts by engaging with the foreign financial institutions, the State Bank of Pakistan (SBP) and the Ministry of Finance and ensured establishment of LCs to sustain uninterrupted refinery operations.

As per the recent news reports, Saudi Arabia has officially linked its $10 to $12 billion investment in a 300k barrels per day that will be positive for the refinery sector, as the existing refineries will be offered a 10 per cent tariff protection for six years on motor spirit (MS) and high-speed diesel (HSD) for planned upgrades, along with a 10-year tax holiday for new investments and upgrades.