KARACHI, Sept 4: It is the corporate results reporting season and some of the giants on the country’s corporate scene are set to unveil figures starting Friday.

The board of directors of Hubco met in London on Thursday, but since the meeting started at 1:30 pm PST, the company would be able to pass on profit figures and appropriations for announcement at the stock exchange on Friday morning. Pakistan Oilfields would declare results on September 15; the PTCL Board is scheduled to meet on September 24, and among the cement bigwigs that have gripped the stock investors’ interest, Lucky has already announced financial numbers. D.G. Khan Cement is expected to come up with its profit and dividend to June 30, also sometime during the current month.

Hubco has held its board meeting on the same day as its parent: The International Power. Murad Ansari, power sector analyst at brokerage KASB, said that for the past one week, speculation over Hubco’s final payout had been running very high. Dividend expectations have varied widely between Rs1.25 to Rs2.60.

The analyst said that he thought the IPP could announce final cash dividend for FY03 in the range of Rs2.20 to Rs2.50. The logical way of calculating Hubco’s expected final dividend, he observed, would be to exclude the extraordinary cash flow from last interim dividend. Hubco had received Rs1,200 million from Wapda in 1H03 as the last instalment for settlement of arrears.

“Excluding that amount, the potential final dividend payout for FY03 comes to around Rs2.26 per share,” the analyst pointed out. KASB’s forecast for after tax profit was Rs6,018 million, 17 per cent lower than last year. But the analyst went on to maintain that in Hubco’s case, investor decisions ought to be based not merely on pure earnings, but cash flows. The drop in earnings was mainly on account of one-time gains booked last year as a result of release of payments by Wapda (approximately Rs300 million) and reduction in operating costs from Operations and Maintenance Contractor (Rs469 million).

Most other analyst agreed. “In Hubco’s case, its all about the dividend,” says Khalid Iqbal Siddiqui, analyst at brokerage firm, InvestCap. He adds: “Profit and loss figures are usually given passing glances only.” The analyst forecast Hubco will pay out a final dividend ranging between Rs2.3 to Rs2.5 per share for FY03. That would bring total FY03 dividend payout to around Rs5.6 to Rs5.8 per share, which was lower than the Rs7.6 per share paid out in FY02.

The lower payout this year was expected to be due to Hubco receiving only one outstanding payment from Wapda (lowering dividend per share by Rs1.1) and also because the IPPs tariff is structured in a way so as to result in higher dividends in initial years.

InvestCap projected after tax profit at Hubco to range between Rs6 and Rs6.1 billion, reflecting a 16-18 per cent drop against FY02. The decline attributable to the front-loaded nature of Hubco’s tariff and return, coupled with reduction in interest income on cash deposits. At the market price of Rs44.10, the share in Hubco offered a yield of 10.9 per cent.