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Hubco declares 16 percent dividend for July-December

KARACHI (March 05 2004): Hub Power Company, which operates the largest non-state power plant in Pakistan, declared a dividend of Rs 1.6 a share or 16 percent for the fiscal first half.

The board of directors approved the dividend for the six months to December 31, 2003, said the company in a notice to the Karachi Stock Exchange. It had paid a dividend of Rs 3.3 a share in the year-earlier period.

Hub Power runs a 1,292 mega watts thermal power plant near the nation's financial hub of Karachi. International Power of the UK owns 20.7 percent of the company. Hub Power's profit fell to Rs 2.58 billion ($45 million) in the six months ended December 31, or Rs 2.23 a share, as compared with Rs 2.88 billion or Rs 2.49 a share in the same period last year.

Market rumours had suggested a dividend of around Rs 1.4 a share for Hubco, said Khalid Iqbal Siddiqui, research analyst, Investcapital Securities, saying: “We, however, had calculated that Hubco could pay out a dividend of up to Rs 1.6 a share based on its cash flows.” Since the pay out was above market expectation, Hubco's price did react slightly positively, he added.

Murad Ansari, research analyst from KASB Equities, said Hubco announced the interim dividend for first half, which was in line with market expectations, adding Hubco paid out an interim dividend of Rs 3.3 a share in March last year, which was higher as Hubco paid out cash after it received arrears from Wapda.

According to analysts, Hubco's interim dividend was also lower as the company had been spending money on acquiring spare-parts for its power plants.

Hubco shares rose 0.10 rupee or 0.3 percent, to Rs 37.35 at the close of the Karachi Stock Exchange on Thursday. The company touched its intra-day high of Rs 37.60 and low of Rs 37.25.

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