KARACHI, Oct 31: The Hub Power Company Limited (Hubco) posted 16 per cent drop in earnings for the first quarter (July-Sept) of the financial year 2007-08, amounting to Rs607 million, compared with profit at Rs722 million for the corresponding quarter of the previous year.

The board which announced results on Wednesday, did not declare a payout.

Earning per share (eps) for the quarter under review stood at Rs0.52 on one,157 million paid-up shares, compared to eps of Rs0.62 on the same number of shares in the previous similar three months.

Investment analyst Umer Pervez at AKD Securities said that the results were lower-than-expected. The brokerage had estimated net profit after tax to settle at Rs648 million, representing earnings per share at Rs0.56.

The turnover of the company improved 12.5pc to Rs13.2 billion, from Rs 11.7 billion in the comparable three months of 2006.

“This was on the back of an increase in power consumption resulting in a higher load factor at the plant,” analyst said. However, 16cp decline in earnings was stated to be due to lower Capacity Purchase Payments (CPP) under the utility’s pre-defined tariff structure and higher non-pass through items reflected in the cost of sales which increased by 14pc YoY.

Power sector analyst Umer Ayaz at JS Global observed that the decline in earnings was mainly linked to decreasing Capacity Purchase Payments (CPP) in response to long term debt payment.

Revenues during the period rose by 14 per cent, he said, due to higher load factor. Other income of the company plunged by 76pc and stood at Rs14.7m for the period under review, compared with Rs62.5 million in the comparable quarter of last year.