Pakistan’s corporate profits surge 45% in 2023 despite economic challenges

83 companies, representing 88 percent of the market capitalization of the KSE-100 index, report a collective after-tax profit of Rs1.66 trillion

Pakistan’s corporate sector witnessed significant profit growth in 2023, even as the country grappled with economic headwinds.

Data from the Pakistan Stock Exchange reveals that 83 companies, representing 88 percent of the market capitalization of the KSE-100 index, reported a collective after-tax profit of Rs1.66 trillion. This marks a 45 percent increase compared to the previous year.

In terms of the U.S. dollar, these profits amounted to $5.94 billion, representing a 6.3 percent rise over 2022. Banks were the largest contributors, accounting for 34 percent of the total profits last year.

When excluding banks from the equation, the total earnings of the remaining companies still rose by 31 percent in local currency, although they saw a slight decrease of 3.8 percent when measured in U.S. dollars.

Oil and Gas Exploration (E&P) companies also played a significant role, contributing 29 percent to the total profits.

Without the E&P sector, the earnings of other companies increased by 40 percent in local currency and 2.5 percent in U.S. dollars.

However, excluding both banks and E&P firms, the profit growth rate was 15 percent in local currency but showed a decline of 15.5 percent in U.S. dollars.

This performance is noteworthy given the broader economic context. Pakistan’s real GDP saw a marginal decline of 0.4 percent in 2023, based on the data from the first three quarters.

In contrast, nominal GDP grew by approximately 25 percent over the same period, suggesting that inflation and other factors have played a role in the nominal GDP increase.

Analysts from Topline Securities point out that corporate earnings often mirror the trends in nominal GDP growth, as companies pass on inflationary pressures to consumers where possible.

They also highlight that the profit growth in sectors such as banking and oil and gas exploration does not directly correlate with the overall economic performance.

Banks benefit from higher interest rates and increased deposit growth due to a larger money supply, while exploration companies gain from rising global oil prices and the depreciation of the Pakistani rupee against the U.S. dollar.


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