KARACHI - Hub Power (HUBC PA) reported Third Quarterly Fiscal Year 2010 earnings (unconsolidated) of Rs 1.44 billion (EPS Rs1.24), up 13 percent Year-on-Year basis while down by 18 percent Quarter-on-Quarter basis. According to an analyst Faraz Farooq no payout was announced in-line with the companys payout history. At Rs 4.29 billion (EPS Rs 3.71), YTD net income posted an increase of 45 percent over PRs2.96b (EPS Rs 2.56) in corresponding nine months of the last year. The earnings growth mainly arrived from up-tick in tariff profile, rupee devaluation and efficiency gains. While the Project Cost Equity (PCE) element of the Capacity Purchase Price (CPP) was originally set 31 percent higher (in real terms) in PPA for FY10 versus that of FY09, the indexation factor for rupee devaluation further lifted the nominal rupee PCE for the period. Moreover, Hubcos plant operated at an average load factor of 77 percent thereby by resulting in generation bonus for the company. Hubcos receivables from Wapda has reported further accumulation at Rs 58 billion on end-March 2010 versus that of Rs51b on end-Dec 2009. Likely reduction in companys receivables from Wapda following the governments recent commitment to inject Rs 116 billion so as to settle the circular debt is identified as the key swing factor for stocks performance. Considering the lucrative dollar dividend IRR of 18 percent. While on the other hand OGDC reported in-line Third Quarter Fiscal Year 2010 numbers with net income coming in at Rs 14.11 billion (FCEL projection Rs 3.29 per share, street range Rs 2.77 3.46 per share), up 12 percent Year-on-Year basis. On sequential basis, Third Quarterly Fiscal Year 2010 EPS of Rs 3.28 remained 14 percent lower over Second Quarterly Fiscal year 2010 earnings which included a one-time positive impact of Rs 8.68 billion in gas sales revenue related to Qadirpur wellhead gas price revision. Net income in the nine months period arrived at Rs 42.6 billion (EPS PRs9.91) about 4pc lower over the similar period of last year despite 8 percent higher net sales. Nearly 44 percent increase in the exploration cost led to this decline. We had projected an EPS of Rs 9.92 for Nine Month Fiscal Year 2010 (please see Equity Focus dated April 27). The earnings announcement was also accompanied by a third interim cash dividend of Rs 1.5 per share (again in-line with our expectation) taking the YTD payout to Rs 4.0 per share. While volumes in boe term likely to remain 5 percent lower, net realisation grew substantially in this quarter at 25 percent (in US$) Year on Year basis. Consequently, this helped the company to achieve 27 percent Year on Year basis growth in the top-line. OGDCs oil production in Third Quarterly Fiscal Year 2010 would be down by 7 percent Year on Year basis and 1 percent Quarter on Quarter basis. Gas supply should see a dip of 5 percent Year on Year basis whereas sequentially it would by up by 7 percent. In boe terms, production would be down by 2 percent in Nine Month Fiscal Year 2010 based on estimates while various swing factors are tagged with the stock.