Hub Power Company: Corporate Briefing Takeaways 

The factors that the Board of Directors considered while announcing dividend were: 1) improvement in cash collection and 2) expectation of payments from recently signed power purchase agreement (PPAs). Going forward, dividend payments will depend on liquidity and cash flows requirements of the company. As per agreement, HUBCO plant will receive its outstanding amount within 30 days, while Narowal plant will receive outstanding amount after the determination of revised tariff by NEPRA.

The management is expected to receive payment of its HUB plant in third week of March 2021. The overdue receivables of HUB and Narowal are Rs32.5 billion, while overdue payments are Rs24 billion.

Furthermore, as part of final agreement, decision regarding pre-mature termination of HUB plant will be finalized by end of FY21.

HUBCO has also signed MoU with Defence Housing Authority (DHA) to jointly evaluate commercial and technical viability of DHA Cogen Limited and setting up five million gallon per day sea water reverse osmosis project.

Both the projects will take at least six months to reach a final conclusion and then another 24 months to complete the project. To note, estimated cost of setting up five million gallon project is US$150 million.

A regards Thar coal power plants, government has started talks with Chinese government to increase tenure of loan from 10 to 20 years and reduction in interest rate from LIBOR plus 4.5% to LIBOR plus 2.0%, but nothing has finalized yet.

Sindh Engro Coal Mining Company (SECMC) is expected to start paying dividends from December 2021.

Thar Energy and ThalNova are expected to commence operations by March 2022 and June 2022, respectively. To highlight, Thar Energy and ThalNova have completed 60% and 34% of construction work, respectively.

Availabilities for HUB plant, Narowal, and Laraib were 91%, 92% and 100%, respectively during 1HFY21 as compared to 90%, 96%, and 100%, respectively in 1HFY20.

Load factors for HUB plant, Narowal, and Laraib were 2%, 27%, and 61%, respectively during 1HFY21 as compared to 1%, 24%, and 41%, respectively in 1HFY19.

The availability and load factor for China Power Hub Generation Company (CPHGC) were 92% and 63% respectively during 1HFY21.

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