KARACHI: The KSE-100 Index companies posted the earnings of Rs403bn down 14 percent YoY in first quarter of FY25 against Rs468billion in the same quarter in FY24, while up 16 percent on QoQ basis. In US$ terms, profitability recorded at $1.4billion in the first quarter of FY25.
This YoY deviation in earnings is majorly contributed to by E&Ps (down 21 percent YoY), Food (down 15 percentYoY), and Refinery which turned into losses of Rs5.3billion in the first quarter of FY25 from profit of Rs12.7billion in the same quarter of FY24, an analyst at Topline Securities, in a research report said.
Banking sector’s earnings remained flat on YoY basis to Rs156billion (39 percent of the total KSE-100 index profitability) in the first quarter of FY25 despite decline in interest rates, the report said.
Whereas, profitability of the fertilizer sector increased by 16 percentYoY to Rs56billion (14 percent of total KSE-100 index profitability) in the first quarter of FY25, amid higher Urea and DAP prices by 32 percent and 9 percent despite lower Urea and DAP offtake by 17 percent and 20 percent, respectively, it added.
The report said that Cement sector’s earnings surged to Rs35billion up 14 percent YoY in the first quarter of FY25 mainly due to higher retention prices along with lower coal cost and efficient power mix despite lower local offtake.
Pharmaceutical sector witnessed a 5.6x YoY growth in profitability to Rs5.6billion in this quarter as compared to Rs1.0 billion in the said quarter in FY24, primarily due to an improvement in margins following the deregulation of non-essential products and a decline in finance costs.
Other sectors like Refinery, OMCs, Textile, and E&Ps recorded decline in earnings during the first quarter of FY25 with profitability decline of 142 percent YoY, 86 percent YoY, 60 percent YoY and 21 percent YoY, respectively. Technology sector reported loss of Rs1.4billion in this quarter primarily led by losses of Pakistan Telecommunication Company (PTC).
“For our analysis, we have taken 95 companies out of the total 100 companies (that have announced their results), which represents 99 percent of the KSE-100 market capitalization. We estimate that adding remaining companies of Index would not materially impact profitability growth trend,” the report said.
The KSE-100 Index companies announced cash dividend of Rs106billion (up 3.0 percent YoY) in the first quarter of FY25 compared to Rs104billion in the same quarter in FY24.
This translates into 26 percent dividend payout in the first quarter of FY25 against 22 percent last year and 70 percent in the 4th quarter of FY24.
The report said that payout ratio of the E&Ps sector increased to 21 percent in the first quarter of 2025, compared to 6 percent in the same quarter in 2024, following an improvement in cash recovery of companies due to the increase in gas prices. Banking sector’s payout ratio also rose from 36 percent in the first quarter of 2024 to 38 percent in the first quarter of 2025.
Banking sector remained the largest contributor with dividend announced of Rs59billion in the first quarter of FY25 followed by E&Ps (Rs18billion), and Fertilizers (Rs6billion).
Copyright Business Recorder, 2024
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