KARACHI, March 5: The Hub Power Company Limited (Hubco) announced interim cash dividend at Rs3.30 per share, i.e. 33 per cent for the year ending June 30, 2003.

The much-awaited interim dividend announced on Wednesday morning by the Board, was within the range of analysts’ expectations of payout between Rs2.90 and Rs3.50.

The reason that the dividend came within the projected range by most analysts, many conceded, was that calculating Hubco’s potential dividend payout was a straightforward task.

A month ago, the company had announced its results for the six months ended December 31, 2002, posting net profit of Rs2.9 billion, which was about the same as in the corresponding period of the previous year.

According to analysts’ calculations, Hubco’s free cash reserves stood between Rs3.65 billion and Rs3.86 billion, which translated into per share free cash flow of Rs3.16 and Rs3.34. Analysts were expecting all or major portion of the Rs1.2 billion instalment received by the company from Wapda to be passed on to the shareholders in the interim dividend. Hubco had received that instalment in September 2002, which settled the entire amount due to Hubco from Wapda. Since Hubco, as an entity was not required to retain any cash for reinvestment purposes, all its free cash flows were expected to be paid out to shareholders. Looking at the interim payout, that proved to be the case.

Equity investors are now forecasting final cash dividend to range between Rs2 to Rs2.25, which would bring full-year dividend to around Rs5.30 to Rs5.50 per share.

Analysts said that Wapda had paid last of the instalment of Rs1.2 billion due from it, completely settling the arrears amount as calculated and agreed upon in the Settlement Agreement signed in December 2000. That meant last of the extra cash flow and an end to the excitement over possible dividend payouts. For the next 7-8 years, Hubco is expected, by most analysts, to disburse average annual dividends in the range of Rs4 to Rs4.50 per share.

Hubco announced on Wednesday that the interim dividend would be paid to shareholders whose names appear in the Register of Members on March 30, 2003. As already announced on January 27, 2003, the books would remain close from March 31, 2003 to April 11, 2003 (both days inclusive), the company said.