KSE-100 companies report 2% YoY rise in profitability to Rs409 billion in 3QFY25

The KSE-100 index companies reported a 2% year-on-year increase in earnings for the third quarter of the fiscal year 2025 (3QFY25), reaching Rs409 billion, compared to Rs401 billion in 3QFY24, according to Topline Securities.  

In U.S. dollar terms, profitability stood at $1.4 billion, also marking a 2% rise from the previous year.

Excluding banks, however, profitability in the sector saw a decline of 5% YoY, dropping to Rs243 billion in 3QFY25. Despite a decrease in interest rates, the banking sector posted an impressive 14% increase in earnings to Rs166 billion, representing 41% of the total KSE-100 profitability, driven by both Net Interest Income (NII) and Non-Interest Income.

On the other hand, the earnings of Exploration and Production (E&P) companies decreased by 10% YoY to Rs91.6 billion in 3QFY25. This drop was attributed to a decline in oil prices, which fell by 8.3% to $74.96 per barrel, and reduced production of oil and gas.

Among the sectors, cement and automobile industries showed strong growth. The cement sector posted a 28% rise in earnings to Rs36 billion, driven by higher cement offtakes, better retention prices, lower finance costs, and falling coal prices. 

The automobile sector saw a 35% increase in earnings, reaching Rs20.5 billion, fueled by a 23% rise in volumetric sales, aided by lower interest rates, reduced fuel prices, and recovering economic activity.

The food and personal care sector recorded a 15% increase in earnings to Rs17 billion, mainly due to a decline in inflation and interest rates. 

The pharmaceutical sector saw a dramatic 97% growth in profitability, reaching Rs6.6 billion, largely due to improved margins following the deregulation of non-essential products and a reduction in finance costs. However, the sector’s quarterly performance showed a 10% decline due to seasonal impacts on sales.

The fertilizer sector, however, faced significant challenges, posting a 27% YoY decline in earnings to Rs28.5 billion, primarily due to a 40% drop in urea offtake and a 50% reduction in DAP offtake, driven by weak farm economics and lower urea prices.

Meanwhile, the power, oil marketing companies (OMCs), textile, and chemicals sectors all saw declines in earnings, ranging from 15% to 44% YoY in 3QFY25. 

The technology sector showed improvement, with losses narrowing to Rs511 million compared to a loss of Rs7.6 billion in the same period last year, largely due to better results from TRG.

On a sequential basis, the KSE-100 index’s earnings dropped by 6% compared to the previous quarter, largely due to seasonal trends in various sectors.

The KSE-100 companies declared Rs119 billion in cash dividends, a decrease of 6% YoY from Rs126 billion in 3QFY24. The dividend payout ratio decreased to 29% in 3QFY25, compared to 31% last year. On a quarter-on-quarter basis, dividends saw a 59% drop, reflecting the usual year-end or semi-annual dividend payout schedule.

For the first nine months of FY25, total dividends paid amounted to Rs493 billion, reflecting a 14% increase, with a payout ratio of 39%. The largest dividend contributions came from the banking sector, with Rs60.5 billion, followed by E&Ps at Rs15 billion and fertilizers at Rs13 billion.

Among individual companies, United Bank Limited (UBL) led the banking sector with a dividend of Rs13.4 billion, followed by Meezan Bank (MEBL) with Rs12.5 billion, and MCB Bank (MCB) with Rs10.6 billion. 

In the E&P sector, Oil & Gas Development Company (OGDC) declared the highest dividend of Rs12.9 billion, while Pakistan Petroleum Limited (PPL) contributed Rs2.7 billion.

The cement sector saw Bestway Cement (BWCL) as the sole contributor, declaring a dividend of Rs4.7 billion in 3QFY25. In the power sector, Pakgen Power (PKGP) announced a dividend of Rs744 million, while Nishat Power (NPL) declared Rs708 million. However, no dividends were declared by Hub Power (HUBC) and Kot Addu Power (KAPCO) for the quarter.