credit & risk analysis of hubco power company pakistan
DESCRIPTION
Credit & Risk analysis of Hubco power company Pakistan. Credit Ratings & its fianacial positionTRANSCRIPT
Credit & Risk Evaluation
Hubco Pakistan
Irfan AhmedHassan Bin Munawar
Azam Ahmed
HUBCOIn 1991, Hubco was incorporated in
Pakistan . As a limited liability companyThe Government requested the sponsors led
by Xenel Industries of Saudi Arabia to present proposals for a 1292 MW plant.
Purpose of the CompanyTo 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
Key performance indicatorsFiscal year ending June (RS in millions)
2013 2012 2011 2010 2009 2008
TURN OVERPROFIT ASSTES DIVIDEND GENERATION (GWh)
165,8629,38899,3137,5228,493
174,7128,910207,8126,9439,091
123,3105,425146,2405,7868,352
99,6945,556122,6965,2078,337
82,7843,78190,1862,7198,257
62,4352,60162,6973,1877,205
Fiscal Year endIn June
Electricity Generation(GWh)
Company’s share(GWh)
% age
2006-072007-082008-092009-102010-112011-122012-13(est.)
97,81497,45194,66399,856102,48491,85088,270
7,2147,2058,2578,3378,3529,0918,493
7.77.48.78.48.29.99.6
Market Share
Financial Performance
2 0 1 3 2 0 1 2(Rs. '000s) (Rs. '000s)
Subordinated loan to subsidiary – unsecured 80,395 -Deposits 5,629 5,629Trade debts 24,799,191 151,161,169Other receivables 769,053 567,929Bank balances 16,852,745 496,872
Total 42,507,013 152,231,599
Credit Risk
Liquidity Risk2012-2013 Less than 6
months between 6 to 12 months
between 1 to 5 years
between 5 to 10 years
Total
Long term loans
Trade and other payables
Short term loans
Total
2,805,266
33,311,632
5,018,395
41,135,293
3,010,935
__
__
3,010,935
24,455,219 __
__
24,455,219
,971,192 ____
10,971,192
433,311,632
1,242,612
5,018,395
79,572,639
Liquidity Risk2011-2012 Less than 6
months between 6 to 12 months
between 1 to 5 years
between 5 to 10 years
Total
Long term loans
Trade and other payables
Short term loans
Total
3,178,732
126,301,387
20,141,883
149,622,002
3,149,689
__
__
3,149,689
25,611,183 __
__
25,611,183
16,264,330 ____
_____
16,264,330
48,203,934
126,301,387
20,141,883
194,647,204
Interest Rate Risk 2012- 2013 2011- 2012
RUPEES IN000
RUPEES IN 000
FIXED RATE INSTRUMENT
Financial Assets 16,852,745 496,872
Financial Liabilities 2,489,861 3,211,967
VARIABLE RATE INSTRUMENT
Financial assets 12,754,790 129,632,359
Financial liabilities 50,744,956 152,973,821
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
Credit RatingThe 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.
FindingsThe 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.
RecommendationTo 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)