KARACHI, April 23: Pakistan’s biggest private power producer, Hub Power Co, announced on Wednesday a 4.1 per cent drop in profit for the first nine months of the 2002-03, broadly in line with the market expectations.

“The slight profit decline was mainly on account of the tariff structure of the company, coupled with the appreciating rupee value,” said Mohammad Sohail, a company analyst at Investcap Securities.

In a statement, Hubco reported post-tax profits of Rs4.502 billion ($77.9m) for the July-March period, versus Rs4.696 billion recorded in the same period last year. Three analysts have projected profits to range from Rs4.4 billion to Rs4.5 billion.

Hubco did not announce any interim dividend but analysts forecast a final dividend of 2.00-2.20 per share. In March, Hubco announced an interim dividend of 3.30 per share.

Analysts expect Hubco to post stable earnings in the current financial year, as Water and Power Development Authority (Wapda) has been contracted to be its only buyer of electricity.

Analysts say Hubco’s tariff is “front-loaded”, which means the company, which started operations in 1997, earns slightly more in the initial years and the earnings gradually decrease as the years go by.

The company’s income is dollar-based and therefore, the appreciating rupee, which has strengthened to 57.79 to a dollar from 60.11 in March 2002, had an impact on the overall profitability.—Reuters