In a landmark year, companies listed on Pakistan’s KSE-100 Index reported their highest-ever earnings of Rs1.7 trillion in FY24, marking a 25% year-on-year increase from Rs1.3 trillion in FY23.
In US dollar terms, profit after tax (PAT) climbed 10% to $5.8 billion during the same period, according to data compiled by brokerage firm Topline Securities.
The growth in profitability was primarily driven by robust performances in the banking, fertilizer, and cement sectors.
Banks saw a 35% increase in earnings, contributing Rs591 billion, or 36% of the total profitability of KSE-100 companies. The sector’s growth was largely fueled by higher net interest income (NII) amid rising interest rates.
The fertilizer sector also posted impressive gains, with profitability rising by 75% year-on-year to Rs168 billion, making up 10% of the total KSE-100 index earnings.
This growth was driven by a 2% increase in urea offtake, a 40% rise in DAP offtake, and higher prices for both products, which surged by 59% and 9%, respectively.
The cement sector saw a 38% increase in earnings to Rs115 billion in FY24, benefiting from higher retention prices and lower coal costs, despite a dip in local sales.
While these sectors thrived, other industries faced challenges. The chemical, engineering, and refinery sectors reported declines in earnings of 38%, 27%, and 25% respectively. The technology sector posted a loss of Rs5.7 billion, mainly due to losses reported by Pakistan Telecommunication Company (PTC).
On a quarterly basis, KSE-100 companies posted an 8% year-on-year growth in earnings, totaling Rs367 billion in the fourth quarter of FY24.
For the analysis, Topline Securities considered 86 out of the 100 listed companies, representing 95% of the KSE-100 market capitalization. Analysis suggested that the inclusion of the remaining firms would not materially alter the overall profitability trend.
Dividend payouts up 30% YoY
Dividend payouts for KSE-100 companies increased by 30% in FY24, reaching Rs666 billion, compared to Rs512 billion in FY23. This translated into a 40% dividend payout ratio, slightly up from 39% in FY23.
Notably, the banking sector contributed the largest share of dividend payouts, with Rs278 billion distributed, followed by the exploration and production (E&P) sector at Rs118 billion and the fertilizer sector at Rs90 billion.
Among banks, United Bank Limited (UBL) led the way with a dividend contribution of Rs54 billion, followed by Meezan Bank (MEBL) with Rs48 billion, and MCB Bank (MCB) with Rs41 billion. In the E&P sector, Oil & Gas Development Company (OGDC) declared a dividend of Rs43 billion, Pakistan Oilfields (POL) Rs27 billion, Mari Petroleum (MARI) Rs31 billion, and Pakistan Petroleum (PPL) Rs16 billion.
In the fertilizer sector, Engro Fertilizers (EFERT) announced a dividend of Rs33 billion, Fauji Fertilizer Company (FFC) Rs30 billion, Engro Corporation (ENGRO) Rs13 billion, Fatima Fertilizer (FATIMA) Rs11.5 billion, and Fauji Fertilizer Bin Qasim (FFBL) Rs1.3 billion.
Power companies also contributed to the record payouts, with Hub Power (HUBC) declaring Rs26 billion and Kot Addu Power (KAPCO) Rs7.5 billion.
In the food and personal care category, Colgate-Palmolive (COLG) led with a Rs14 billion payout, followed by Nestle Pakistan (NESTLE) with Rs8.3 billion, and Unilever Pakistan (UPFL) with Rs7 billion.
Chemical sector dividends were led by Lucky Core Industries (LCI) with Rs5.5 billion, Engro Polymer (EPCL) with Rs3 billion, and Lotte Chemical (LOTCHEM) with Rs2.3 billion.
