Philip Morris Pakistan posts Rs1.76bn profit for 2020

Philip Morris (Pakistan) Limited has announced a profit after tax of Rs1,765 million for the year ended 31st December 2020 as compared to a loss after tax of Rs1,980 million in the corresponding period last year.

“The overall increase in profit after tax from last year is mainly due to a significant decrease in other expenses by Rs2,732 million, which is largely attributable to the one-off impairment and employee separation cost charged on account of closure of the company’s factory in Kotri during 2019,” a statement issued by the company read.

During the year under review, the company’s volume declined by 20pc, mainly reflecting the pressure faced by the legally compliant taxpaying cigarette sector from the expanding illicit one, which now accounts for approximately 37pc of the total market for the year 2020 versus 33.1pc for the year 2019 (retail audit).

The company’s contribution to the national exchequer, for the year ended December 31, 2020, in the form of excise duty, sales tax and other government levies, stood at Rs22,210 million, a decrease of 6pc compared to the preceding year. “This is mainly attributable to the excessive excise duty increases of 93pc (value tier) during federal budgets of September 2018 and June 2019 that stretched the price gap between duty evaded and duty paid cigarettes which are selling at lower prices than the minimum price prescribed under tax regime with respect to levy and collection of federal excise duty i.e. Rs63 per pack,” the statement read.

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During the period under review, the company’s domestic net turnover stood at Rs13,983 million, resulting in an increase of 7pc driven by the excise-led price increase in June 2019 coupled with price increase in February 2020; both were essential to offset the adverse impact of severe volume decline of 20pc versus 2019. The company’s exports turnover stood at Rs2,613 million ($16.3 million), showing a significant increase as compared to last year.

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