Results season comes to an end: Corporate earnings jump 19 per cent

Published: May 4, 2011
Manufacturing sector rises on goods’ prices and not sales.

Manufacturing sector rises on goods’ prices and not sales.


Corporate earnings showed an impressive growth of 19 per cent on a yearly basis in the first quarter of 2011 with the chemical and textile sectors leading the way.

However, the stock market failed to respond in the same manner as it gained only 2.1 per cent in April and underperformed by 0.4 per cent compared to regional peers, according to JS Global Capital. Also, average daily volumes declined by 25 per cent to 76 million shares.

Corporate earnings were recorded at Rs72.7 billion against Rs61.3 billion in the corresponding period of last year.

Notably, profits of energy companies rose 16 per cent on a yearly basis while the manufacturing sector’s bottom-line grew by 80 per cent, said JS Global Capital analyst Atif Zafar in a research note.

Profits of the services sector remained flat relative to last year as the banking sector recorded a below par growth of eight per cent.

Profits of the manufacturing sector recorded a sharp jump of 80 per cent, however, the gains were led by higher prices and not volumes growth.

The fertiliser sector remained at the forefront with a 42 per cent growth in its profits aided by an average increase of 51 and 32 per cent in urea and di-ammonium phosphate prices, though sales declined.

Similarly, the cement sector also benefited from an average rise of 37 per cent year-on-year in product prices while sales volume was down eight per cent. Textile companies made hay on rising yarn and cotton prices.


Energy companies reported an increase of 16 per cent in earnings, led by a 20 per cent growth in profits of exploration and production companies which benefited from better production flows and rise in wellhead gas prices.

The country’s exploration and production companies include Oil and Gas Development Company, Pakistan Petroleum Limited and Pakistan Oilfields.

Moreover, higher refining margins resulted in a 34 per cent growth in earnings of refiners while power utilities saw their earnings advance by 17 per cent.


While the banking sector witnessed a growth of eight per cent, the services sector’s profits remained flat relative to last year.

Published in The Express Tribune, May 4th, 2011.

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