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Hubco's six-month profits down by 11.8 pc

RECORDER REPORT

KARACHI: Hub Power Company's profit in the six months ended December 31, 1999 fell by 11.8 percent to Rs 2.916 billion compared with Rs 3.303 billion in the same period last year.

This was stated by the company's Chief Executive Syed Khurshid Hussain at its board of directors' meeting held in Dubai on Wednesday, says a message received here.

The company skipped interim dividend for the six months ended December 31, 1999 as the continuous increase in trade debts and dispute with the government have an adverse impact on the cash flows.

The total debt of the company includes Rs 11.250 billion which is either disputed or not paid by Wapda for which no provision has been made by the company. The tussle with the state-run utility led to this huge receivable. Both the company and the government have been locked in the rift for more than 24 months.

The turnover for the period was Rs 10.176 billion as against Rs 9.767 billion of the same period a year ago. The operating costs were Rs 5.026 billion resulting in a net profit of Rs 2.916 billion. The turnover is based on amounts billed to Wapda in accordance with the power purchase agreement. Included in this amount is Rs 2.423 billion which has not been paid by Wapda. In the event that these amounts are not paid, it would result in a reduction in the net profit by approximately Rs 2.423 billion to Rs 493 million.

During the period, the company, continued to be involved in litigation both inside Pakistan and abroad, has been the subject of investigation by the Federal Investigation Agency (FIA) and government appointed auditors with whom the company has co-operated fully.

The company has denied any wrongdoing and continues to defend itself vigorously. The company is confident that it would eventually be vindicated and that the accusations made against it would be proved baseless. Nevertheless, the company continues to seek an amicable resolution of its disputes with Wapda in an atmosphere of mutual respect and co-operation. Throughout the period, the company has fulfilled its obligation under its various contracts and continues to do so.