HUBCO profit dips 31% as lower output hits revenue

ISLAMABAD: Pakistan’s largest independent power producer, Hub Power Company (HUBCO), has reported a sharp fall in its yearly earnings, as lower electricity generation and changes to power purchase agreements weighed on its performance.

The company’s profit slipped by more than 31 percent to Rs51.77 billion in the year ending June 30, 2025, compared to Rs75.29 billion recorded in the same period last year, according to a notice sent to the Pakistan Stock Exchange on Wednesday. Earnings per share dropped to Rs35.56 from Rs53.98 over the year.

Despite the profit slump, HUBCO announced a final cash dividend of Rs10 per share, or 100 percent, in addition to interim payouts of Rs5 per share already made during the year.

Revenues under pressure

On a consolidated basis, revenue from contracts with customers plunged 36 percent to Rs83.35 billion in FY25, down from Rs130.53 billion a year earlier. Analysts at Ismail Iqbal Securities attributed the topline decline to reduced generation and amendments in power purchase agreements. They noted that while overall electricity production in the country remained broadly stable, HUBCO’s plants delivered slightly lower output compared to last year.

The company’s cost of revenue also fell, dropping nearly 30 percent to Rs43.53 billion, yet gross profit still declined by 42 percent to Rs39.82 billion.

Mixed performance in other income and expenses

Other income rose to Rs4 billion, showing a 22 percent improvement. However, operating expenses surged by 57 percent to Rs3.85 billion. Operating profit stood at Rs38.04 billion, reflecting a 44 percent decline.

HUBCO managed to reduce its finance costs by 43 percent to Rs15.2 billion. Its share of profits from associates and ventures brought in Rs41.3 billion. Overall, profit before taxation was Rs64.1 billion, down 29 percent, while tax payments fell 15 percent to Rs12.5 billion.

Contribution to the national grid

HUBCO remains Pakistan’s first and one of its largest independent power producers, with an installed capacity of 2,289 megawatts. Its subsidiary Narowal Energy Limited continues to operate a 225MW power plant in Punjab, while Laraib Energy Limited, in which HUBCO holds a 74.95 percent stake, contributed 354 gigawatt-hours of hydropower to the national grid during the year.

The hydropower unit, located near New Bong Escape in Azad Jammu and Kashmir, delivered clean electricity without fuel costs, helping Pakistan save around $30 million in foreign exchange.

While HUBCO continues to play a key role in powering the country, its latest results reflect the challenges faced by the energy sector, where lower demand, shifting contracts, and rising costs remain pressing concerns for producers and policymakers alike.