HUBC: FY12 Profitability to Augment by 50%

HUB Power Company (HUBC) is scheduled to announce its FY12 result on July 18, 2012. Our estimates for the company’s profitability for the period stand at PKR8,158mn (EPS of PKR7.05), an increase of 50% YoY    In May12, the management of HUBC decided to avail advantage from the tax benefit scheme launched by FBR and paid a tax liability amounting to PKR1.65bn (PKR1.43/share)    This could have hampered company’s ability to pay higher dividend for FY12; however with the approval of final tariff for NPP and an anticipated bullet payment on account of tariff differential claim is likely to compensate    The company is anticipated to announce final dividend of PKR2.5/share along with the earnings announcement; which will take FY12 annual payout to PKR5.5/share    We have a BUY stance on the stock with a DDM based Dec12 TP of PKR48/share. The stock offers an upside of 12% from yesterday’s closing of PKR43/share

HUBC: FY12 Profitability to Augment by 50%