Islamabad, Sep 26 (FN Bureau) Pakistan’s top 86 listed businesses on the national stock market reported a record net profit of Rs1.7 trillion, indicating a 25% gain in the fiscal year ending June 30, amid challenging economic conditions, including high inflation, record interest rates, and a temporary depreciation of the currency, media reports said. In contrast to their low volumetric production as recorded by the Pakistan Bureau of Statistics (PBS), some large-scale manufacturing businesses in sectors like chemicals, car, cement and fertiliser experienced historically high rises in profitability. According to analysts. this implied that these sectors were able to weather the economic downturn by selling fewer products at noticeably higher prices, The Express Tribune said. “Pakistan Strategy: Record Corporate Profitability in FY24; Earnings Up 25% YoY; Dividend Up 30% in FY24,” says a comprehensive research undertaken by Topline Research, which notes that net profitability increased by 10% to $5.8 billion in US dollars from FY23. The banking industry, which reported profits of Rs. 591 billion, up 35% on an annual basis, was the main driver of the gains in earnings. The cement industry made Rs 115 billion, up 38% from FY23, and the fertiliser business came in second with a net profit of Rs 168 billion, up 75% from FY23.
Topline Research found that rising Net Interest Income (NII), supported by higher interest rates all year long, drove banking sector earnings, which accounted for 36% of the KSE-100 index’s overall profitability. From June 2023 to June 2024, the central bank held its key policy rate at a record high of 22%; it then reduced it by 450 basis points to the current 17.5%. Thanks to large price increases of 59% for urea and 9% for DAP, a 2% increase in urea offtake, and a 40% increase in DAP sales, the profitability of the fertiliser sector increased by 75% to Rs168 billion. Despite a drop in domestic demand, the cement industry reported a 38% increase in earnings to Rs115 billion, driven by higher retention prices and cheaper coal costs. In FY24, profit growth was slower in other industries, such as chemicals, engineering, and refineries, where profitability increased by 38%, 27%, and 25%, respectively. An estimated Rs5.7 billion was lost by the technology industry, mostly as a result of losses suffered by Pakistan Telecommunication Company (PTC). However, the pharmaceutical industry saw a 71% rise in profitability, rising from Rs 6 billion in FY23 to Rs 10 billion in FY24. This was mostly because of lower financing costs and better margins brought about by the deregulation of non-essential items.