Packages Limited posts 76pc fall in consolidated profit

LAHORE: The Board of Directors (BOD) of Packages Limited (PKGS) met on Friday to review the company’s performance and announce its financial results for the accounting year ended December 31, 2019.

During the meeting, the board recommended a cash dividend to the shareholders for approval at the Annual General Meeting (AGM), purposed to be held on April 29, 2020.

The BOD recommended dividend to the preference share/convertible stockholder (International Finance Corporation) as per the term of the subscription agreement between Packages Limited and IFC; and to the ordinary shareholders at the rate of 120pc i.e. Rs12 per ordinary share of Rs10 (2018: cash dividend 150pc i.e. Rs15 per ordinary share of Rs10).

The packaging giant posted a profit after tax of Rs1.346 billion during the period under review as compared to Rs2.736 billion during the same period last year, showing a decline of 50.8pc. Meanwhile, the company’s consolidated profit after tax clocked at Rs278 million as compared to Rs1.160 billion during the same period last year, depicting a decrease of 76pc.

On the other hand, PKGS’ gross profit increased by 33.32pc, from Rs3.28 billion last year to Rs4.373 billion in 2019. The company reported a consolidated gross profit of Rs10.187 billion for the year ended December 31, 2019, as compared to Rs6.739 billion, showing an increase of 51.16pc.

PROPOSED RESTRUCTURING

During the meeting, the BOD also resolved to complete the transfer of the company’s packing business to Packages Converters Limited and to hold the transfer of its investment business to Packages Investments Limited for the time being.

PKGS, in its letter to the Pakistan Stock Exchange (PSX) on Friday, stated, “As mentioned in our earlier announcement on April 25, 2019, this transfer to our wholly-owned subsidiary (Packages Converters Limited) will not affect the rights of the PKGS shareholder.”

PKGS in its letter had also enclosed a form which disclosed that Packages Converters Limited and Packages Investments Limited (wholly owned subsidiaries of the company) have informed the Securities and Exchange Commission of Pakistan (SECP), which has approved their respective applications for issuance of shares for consideration.

“We included the form disclosing the above information in accordance with Section 96 and 131 of the Securities Act, 2015 and Regulation 5.6.1(a) of the PSX Rule Book.”