HUBCO advances BYD EV plant as profits dip on lower power revenue

Hub Power Company Limited said it is moving ahead with a new electric vehicle assembly plant in partnership with China’s BYD while expanding its model lineup and charging network, as it navigates lower power revenues and higher taxes.

Management told analysts at a corporate briefing on first-half fiscal 2026 results that construction is underway on a completely knocked-down electric vehicle assembly plant at Gharo through Mega Motor Company. The plant will have an initial capacity of 25,000 units per year on a single-shift basis.

Financial close was achieved in January 2026, and commercial operations are targeted for the second half of 2026. The roughly $150 million project is being financed through about $90 million in debt from local and international lenders and around $60 million in equity.

HUBCO said it has expanded BYD’s model lineup in Pakistan with the addition of the Atto 2 and Sealion 7 and launched the Shark 6 plug-in hybrid pickup in July last year. The company has established three experience centers and two care centers in Karachi, Lahore and Islamabad and inaugurated its first third-party dealership in Faisalabad.

Through Hubco Green (Pvt.) Ltd., the company has installed 16 DC fast chargers nationwide, ranging from 60 kilowatts to 120 kilowatts, along major highways. Talks are underway with oil marketing companies, including GO and ARAMCO, to expand the charging network.

1HFY26 earnings

On a consolidated basis, HUBCO reported net profit attributable to shareholders of PKR 22.3 billion, or earnings per share of PKR 17.16, for the first half of fiscal 2026, down 5% from PKR 23.3 billion a year earlier. Consolidated revenue fell 28% year on year to PKR 34.1 billion, mainly due to the early termination of the Hub base plant power purchase agreement and renegotiation of the Narowal PPA.

On an unconsolidated basis, net profit rose 8% to PKR 14.6 billion, supported by higher dividend income from subsidiaries and associates.

Power, coal and receivables

HUBCO's total power generation capacity stands at 2,289 megawatts. Through its stake in Sindh Engro Coal Mining Company, mining capacity is 7.6 million tons per year, while exploration and production capacity, including joint ventures, is 602 million cubic feet per day.

Thar coal-based plants with a combined capacity of 660 megawatts supplied 1,691 gigawatt-hours to the national grid during the first half of fiscal 2026, generating estimated foreign exchange savings of about $116 million, management said. After achieving project completion dates, Thar Energy Ltd. and ThalNova Power Thar declared maiden dividends of PKR 1 billion and PKR 12 billion, respectively, with HUBCO’s share amounting to PKR 600 million and PKR 4.9 billion.

Management said tariff true-ups for the Thar plants have been submitted to the regulator and final determinations are awaited.

Outstanding receivables remain elevated, including about PKR 68 billion owed to China Power Hub Generation Company, PKR 8 billion to Thar Energy Ltd., PKR 7 billion to ThalNova Power Thar, PKR 6 billion to Laraib Energy Ltd. and PKR 1.4 billion to Narowal Energy Ltd.

The company also expects an immediate cash outflow of around PKR 2.5 billion due to the impact of the Super Tax, with an additional PKR 4-5 billion anticipated in the second half.

Offshore blocks and new projects

HUBCO said its exploration arm, Prime, secured working interests in four offshore blocks — Sapat Bander, Bin Qasim South, Keti Bandar and Zarar — and assumed operatorship of Sapat Bander.

In mining, management said geological and geophysical studies conducted with Ark Metals have confirmed promising mineral potential, allowing the project to move toward a pre-feasibility stage, though executives cautioned that mining ventures have long gestation periods.

The company is also evaluating an aluminum smelter project at the Hub site and has signed a memorandum of understanding with Pakistan State Oil for a potential oil terminal that would connect to the white oil pipeline. Further updates will be shared once plans are finalized, management said.

ESG and community initiatives

On sustainability, HUBCO said it planted 4,500 trees, enhanced waste and water management practices and aligned reporting with IFRS S1 and S2, GRI and SECP requirements.

The company continues to support 29 schools run by The Citizens Foundation, free medical camps, women empowerment initiatives and clean water projects in Thar and other project areas.

Looking ahead, management said Sindh Engro Coal Mining Company’s Phase III expansion is expected to come online by the end of 2026, aimed at supplying coal to Lucky Electric Power Company, subject to regulatory approvals.