Hub Power Company Limited (HUBCO), the country’s leading Independent Power Producer (IPP), reported a significant decline in its first-quarter profit for fiscal year 2026, reflecting the continued pressures in Pakistan’s energy sector. According to the notice filed with the Pakistan Stock Exchange (PSX) on Thursday, HUBCO’s net profit for the quarter ended September 30, 2025, fell by nearly 35% to Rs13.28 billion, down from Rs20.31 billion in the same period last year.
The decline was mirrored in earnings per share (EPS), which dropped to Rs8.96 per share, compared to Rs14.74 per share in the corresponding period of FY25. Despite the decrease, the company announced an interim cash dividend of Rs5 per share, equivalent to 50% of the face value, demonstrating HUBCO’s commitment to providing returns to its shareholders even amid challenging market conditions.
Revenue challenges were a major factor behind the profit contraction. On a consolidated basis, HUBCO’s revenue from contracts with customers fell sharply by 46% to Rs17.4 billion in 1QFY26, compared to Rs32.04 billion recorded in the previous year. This decline in revenue was partially offset by a reduction in the company’s cost of revenue, which decreased nearly 30% to Rs9.8 billion from Rs13.98 billion in 1QFY25. Nonetheless, gross profit fell 58% to Rs7.59 billion, translating to a gross profit margin of 43.6%, down from 56.3% in the prior year.
Operating performance also reflected a downward trend, with HUBCO’s profit from operations declining 56% to Rs8.2 billion in 1QFY26. However, other income provided a modest buffer, increasing by 26% to Rs1.3 billion compared to Rs1 billion in the same period last year. The company’s financing costs also eased significantly, falling nearly 54% to Rs2.5 billion, which helped mitigate some of the pressure on net profitability.
HUBCO’s investments in associates and ventures generated a share of profits amounting to Rs10.8 billion in the quarter, up marginally by 4% from the previous year, reflecting the company’s diversified portfolio and continued performance in joint ventures. Despite these gains, profit before taxation declined by 30% to Rs16.45 billion, while tax payments increased 7% to Rs3.17 billion, slightly eroding the bottom line.
The results underscore the broader challenges facing Pakistan’s power sector, including fluctuating demand, regulatory pressures, and macroeconomic uncertainties. HUBCO, as the largest IPP in the country, continues to navigate these pressures through operational efficiency, prudent cost management, and strategic investments, while maintaining its dividend policy to support shareholder confidence.
Analysts note that while the quarterly decline is significant, HUBCO’s diversified asset base, focus on cost containment, and continued earnings from associates position the company to manage volatility in the energy sector. Investors will be closely monitoring subsequent quarters for signs of revenue recovery and margin stabilization as the company adapts to evolving market conditions.
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