LAHORE - The Hub Power Company Limited receivables from Water and Power Development Authority have reached the amount of Rs57 billion while this outstanding amount was recorded on Dec last year at Rs53 billion, it was learnt. Energy experts said though the stuck amount from Wapda was secured by a government guarantee, however, the total amount outstanding as of Dec 2008 was risen to Rs53 billion out of which overdue amount was Rs48 billion to the power generation company. Farhan Mahmood, an energy analyst, pointed out the burden of higher receivables has been shifted to PSO but payable to the largest oil marketing has gone up to Rs42 billion as on December 2008. Hubco recorded financial charges of Rs2,967 million for 1HFY09 (up 34per cent YoY) as the ongoing circular debt issue required the company to avail short term running finance facilities. For 2QFY09, the company recorded financial charges of Rs597 million, which though higher in YoY terms witnessed a decline of 6 per cent from 1QFY09. Finance cost rose by 34 per cent to Rs1.2 billion due to increase in short term borrowing arising from liquidity crunch led by circular debt in the energy chain. As a result short-term borrowings stood at Rs10.5 billion. However, increased markup on Wapda's overdue receivables somewhat mitigated the impact of high financial charges. The Hubco has announced Rs1.35 per share interim cash dividend for 1HFY09. This could have been a positive surprise for the market; however, it fell on deaf ears amid weak broader market sentiments. During 1HFY09, earnings stood at Rs1.7 billion (EPS Rs1.46) versus Rs1.3 billion (EPS Rs1.16) in 1HFY08. This increase was mainly attributed to currency devaluation, generation bonus and lower repair and maintenance. Analyst said that with revenues of the IPPs denominated in dollars, the rupee depreciation played a major actor in YoY revenue growth of 86 per cent for 1HFY09 (and 59per cent for 2QFY09). Higher rupee/dollar was further supported by efficient capacity utilization as Load Factor averaged 76per cent in 1HFY09 against 62per cent in 1HFY08. Analyst from JS Capital Market said that company's 225MW oil-fired power project is expected to achieve Financial Closure next month while that of Hydro Project i.e Laraib Energy of 84MW (subsidiary of Hubco) is expected in May 2009. According to company estimates, the Naraowal Project is expected to come online by March 31, 2010. The company already entered into Power Purchase Agreement for 25 years on November 20, 2008 with Wapda. The estimated total project cost of $300 million with a debt to equity ratio of 70:30. The entire debt amount is expected to be funded locally. The company in its recent accounts notified that the negotiations with financial institutions for long-term loans are underway for this project. On the other hand, Hubco remaining equity commitment is US$31 million (Rs2.45 billion) in Laraib Energy in which Hubco has 75per cent equity interest. The company is financing the capital injection through bank borrowings and is planning to manage further investment in subsidiary through same means.