Siemens Pakistan’s whopping profits

Siemens Pakistan Engineering Company Limited (PSX: SIEM) recently announced its financial performance for its first half of 2023 ending on March 31, 2023 with a whopping jump in profits. The company’s fiscal year ends on 30 September.

SIEM was set up as a public limited company in 1953, and it is involved in the selling of electronic and electrical capital goods along with executing projects under contracts as well.

In the first half of the year for Siemens Pakistan, the company’s sales increased by 25 percent year-on-year due to noticeable jump in the numbers of orders. For context, the growth in the number of orders in 2022 was 77 percent year-on-year, while that in the first quarter of 2023 ending in December 2022 was 147 percent year-on-year. Siemens Pakistan Engineering Company Limited’s earnings were, however, seen growing staggeringly from Rs678 million in 1H of 2022 to a profit of Rs2.467 billion in 1H of 2023. The company’s gross margins were seen going through the roof in 2Q of 2023 especially due to significant decline in cost of sales and services.

This rise in gross profits for the period continued to be reflected in operating profits and net profits due to no significant and equivalent increase in key expenses except for rise in allowance of credit loss during the period.

Despite the current economic and political turmoil, SEIM has been able to post massive growth in profitability. However, amid the waning macro-economic stability, foreign exchange issue and rising risks for the foreign investors, the company recently announced that it intends to sell its energy portfolio to a non-affiliated entity of Siemens Energy Group.