Credit & Risk analysis of Hubco power company Pakistan. Credit Ratings & its fianacial position

2. Credit & Risk Evaluation
Hubco Pakistan
Irfan Ahmed
Hassan Bin Munawar
Azam Ahmed

3. HUBCO
 In 1991, Hubco was incorporated in Pakistan . As a
limited liability company
 The Government requested the sponsors led by Xenel
Industries of Saudi Arabia to present proposals for a
1292 MW plant.

4. Purpose of the Company
 To generate additional power to fill the gap between
supply and demand.
 Aim to help the nation in reducing its costs of energy
by converting our oil fired boilers at Hub plant to coal
fired boiler.
 Continuing to be major player in Pakistan power
sector

5. Key performance indicators
2013
Fiscal year ending
June (RS in millions)
2012
2011
2010
2009
2008
TURN OVER
PROFIT
ASSTES
DIVIDEND
GENERATION (GWh)
174,712
8,910
207,812
6,943
9,091
123,310
5,425
146,240
5,786
8,352
99,694
5,556
122,696
5,207
8,337
82,784
3,781
90,186
2,719
8,257
62,435
2,601
62,697
3,187
7,205
165,862
9,388
99,313
7,522
8,493

6. Market Share
Fiscal Year end
In June
Electricity Generation Company’s share
(GWh)
(GWh)
% age
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13(est.)
97,814
97,451
94,663
99,856
102,484
91,850
88,270
7.7
7.4
8.7
8.4
8.2
9.9
9.6
7,214
7,205
8,257
8,337
8,352
9,091
8,493

7. Financial Performance

9. Credit Risk
2013
(Rs. '000s)
2012
(Rs. '000s)
Subordinated loan to subsidiary – unsecured
Deposits
Trade debts
Other receivables
Bank balances
80,395
5,629
24,799,191
769,053
16,852,745
5,629
151,161,169
567,929
496,872
Total
42,507,013
152,231,599

10. Liquidity Risk
2012-2013
Less than 6
months
between 6 to between 1 to between 5 to Total
12 months
5 years
10 years
Long term loans
2,805,266
3,010,935
Trade and other payables
33,311,632
__
Short term loans
Total
5,018,395
41,135,293
24,455,219
__
__
3,010,935
,971,192
____
__
24,455,219
433,311,632
1,242,612
5,018,395
10,971,192
79,572,639

11. Liquidity Risk
2011-2012
Less than 6
months
between 6 between 1 between 5 Total
to 12 months to 5 years
to 10 years
Long term loans
3,178,732
3,149,689
25,611,183 16,264,330
48,203,934
Trade and other
payables
126,301,387
__
__
126,301,387
Short term loans
20,141,883
Total
149,622,002 3,149,689
__
____
__
_____
25,611,183
16,264,330 194,647,204
20,141,883

12. Interest Rate Risk
2012- 2013
2011- 2012
RUPEES IN
000
RUPEES IN
000
Financial Assets
16,852,745
496,872
Financial Liabilities
2,489,861
3,211,967
Financial assets
12,754,790
129,632,359
Financial liabilities
50,744,956
152,973,821
FIXED RATE INSTRUMENT
VARIABLE RATE INSTRUMENT

13. Foreign Exchange risk
 Financial
assets
of
the
company
include
Rs.271.383 mn (2012: Rs 87.315 mn) in foreign
currencies are subjected to currency risk exposure
 Financial liability of the company include
Rs 820.040 mn (2012: Rs 145.148 mn) in foreign
currency are subjected to risk exposure

14. Credit Rating
 The Pakistan Credit Rating Agency (PACRA) has
assigned a long-term entity rating of ‘AA+’ (double A
plus)
 Short-term rating of ‘A1+’ (A one plus) to Hub Power
Company Limited.

15. Findings
 The current year net profit has gone up by 14.63%
 The return on equity also increased from 27% to 30%.
 Because of increased earnings this year, the dividend per
share is also higher over previous years i.e. Rs 8 per share
 Because of better working capital management & circular
debt settlement at year end the operating cycle is also
shortened from 15 days 1 day.

16. Recommendation
 To continue generation in coal for cheap electricity
 Build a sustainable future with energy sufficiency
 Generate energy for thousands of households across
Pakistan
 Strengthening system for Health, Safety and
Environment (HSE)