ISLAMABAD: Packages Limited (PKGS), one of Pakistan’s most well-known conglomerates, posted a 50% increase in its total consolidated revenue for the year ended December 2022. However, rising cost of goods sold and finance cost led the company to post a profit after tax (PAT) of Rs 6,979 million, a slight 2% decline year on year.
The company posted its financials for 2022 on the Pakistan Stock Exchange (PSX) at the start of this week.
The company earned a record total revenue of Rs 121.8 billion in 2022. But an increase of over 50% in cost of sales and services to Rs 96.5 billion led to a gross profit of Rs 25.3 billion, still up 52% over the preceding year.
Control over the expenses by the company resulted in operating profit of Rs 19 billion, up 56% compared to 2021. However, ever-rising interest rates caused a massive 180% increase in finance cost to Rs 7.25 billion. This, coupled with Rs 4.9 billion tax, led to a PAT for the company of Rs 6.98 billion in 2022, compared to Rs 7.15 billion in the preceding year.
The conglomerate also announced a 275% cash dividend which translates into Rs 27.50 dividend per share. This is the second highest dividend payout by the company in its history.
Packages Ltd underwent internal restructuring in 2020 and became a holding company. It transferred its manufacturing and packaging business to its wholly owned subsidiary (‘Packages Convertors Limited’). The purpose of this arrangement was to develop operating synergies across businesses, managing operations in a focused manner and streamlining the ownership structure.
This meant that the performance of Packages Limited was dependent on the functioning of its subsidiaries, Packages Convertors, Bulleh Shah Packaging (Private) Limited, DIC Pakistan Limited, and Packages Real Estate (Private) Limited, etc.
Packages has been at the forefront of innovation and leading business in the country ever since it started operation in 1956. Founded by Syed Babar Ali, one of the sons of legendary colonial era Lahori merchant Syed Maratib Ali, the multinational packaging company based in Lahore began as a joint venture between the Wazir Ali Group, and two Swedish companies named Akerlund and Rausing.
The group now owns a number of companies that include the Coca Cola Bottling plant in Lahore, Packages Mall, Milkpak, IGI General Insurance, Treet Corporation, Tullo Cooking Oil, amongst many more.
The principle activity of the company is to manage investments in its subsidiary companies, associated companies and joint ventures, engaged in various businesses including manufacturing of packaging materials, tissue, consumer products, industrial inks, paper, paperboard products and corrugated boxes, biaxially oriented polypropylene (‘BOPP’) and cast polypropylene (‘CPP’) films, ground calcium carbonate products, insurance, power generation and real estate.