KSE-100 cos’ FY22 PAT grows 22pc to Rs1.0trn YoY

25 Sep, 2022

KARACHI: The KSE-100 companies’ profit after-tax (PAT) grew by 22 percent on year-on-year basis to Rs 1.0 trillion in FY22.

The slowdown in growth is primarily due to impact of super tax, Topline Securities research report said. However, profit before tax (PBT) of KSE-100 Index companies increased by 42 percent on YoY in FY22 to Rs 1,764 billion in FY22 versus 49 percent on YoY in FY21.

In US$ terms, PAT rose 10 percent YoY to $5.6 billion while profit before tax (PBT) up 28 percent on YoY to $9.9 billion in FY22.

To recall, in FY23 budget, the government imposed 10 percent super tax for 15 specified sectors with earnings in excess of Rs 300 million for TAX YEAR 2022 (FY22) with retrospective implementation. Furthermore, 1-4 percent slab wise super tax was also imposed on sectors excluding specified sector with earnings of Rs 150-300 million or above.

The increase in profitability has largely been led by Oil & Gas Marketing (OMCs) which was up 192 percent YoY, Oil & Gas Exploration (E&Ps) up 30 percent YoY, and Refinery up 639 percent YoY in FY22.

“Though, the profits are rising but concern remains on the quality of these earnings as a significant percentage of the earnings are not cash earnings due to circular debt and piling up of receivables for companies in energy chain,” the report said.

Other sectors like Textile, Banks, and Chemicals, also gave major support during FY22.

On the flip side, Fertilizers, and Power sectors reported decline in profits during FY22, with earnings dropping by 9 percent YoY each.

In 4QFY22, PAT of KSE-100 companies fell by 6 percent YoY led by Banks, E&Ps and Fertilizers. While PBT of KSE index companies was up by 67 percent YoY during 4QFY22.

In spite of high profit, dividend payout was down by 3 percent YoY to Rs392bn in FY22. This is probably due to circular debt that is affecting cash flow of companies. E&Ps dividend remain flat despite 30% earnings growth. Similarly, Banks dividend was down by 12 percent YoY.

“For our analysis, we have taken 81 companies out of the total 100 companies (that have announced their results), which represents 93 percent of KSE-100 market capitalization. We believe that adding remaining companies would not materially impact profitability growth trend,” the report maintained.

Copyright Business Recorder, 2022

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