Top 95 PSX firms report Rs403b profit

Ninety-five of the top performing companies listed on the Pakistan Stock Exchange (PSX) reported a cumulative net profit of Rs403 billion in the first quarter (July-September) of the fiscal year 2024-25.

According to data from Topline Research, this profit represents a 14% decline compared to the Rs468 billion recorded in the same quarter last year (FY24) but is a 16% increase from the previous quarter ending June 30, 2024. In US dollar terms, this quarter's profitability stood at $1.4 billion.

These 95 companies make up the KSE-100 Index at PSX, which represents 99% of the index's market capitalisation. The index declined by 577.53 points, or 0.64%, to 90,286.56 points on Wednesday following profit-taking after reaching a record high near 92,000 points earlier in the day.

Topline Research attributed the year-on-year (YoY) earnings decrease to declines in the oil and gas exploration (-21% YoY), food (-15% YoY), and refinery sectors, with the latter shifting to a Rs5.3 billion loss this quarter from a Rs12.7 billion profit in FY24's first quarter. This analysis was published in a report titled "Pakistan Strategy - Corporate Profitability in 1QFY25; Earnings Down 14% YoY; Dividend Up 3% in 1Q2025." The banking sector, despite a dip in interest rates, maintained steady earnings year-on-year at Rs156 billion, accounting for 39% of the total KSE-100 index profitability.

Meanwhile, the fertiliser sector's profits rose 16% to Rs56 billion (14% of the KSE-100 index's total profitability), driven by urea and DAP price increases of 32% and 9%, respectively, despite consumption declines of 17% and 20%. The cement sector's earnings increased by 14% to Rs35 billion, mainly due to higher retention prices, lower coal costs, and an efficient power mix, offsetting reduced local demand. The pharmaceutical sector saw significant growth, with profitability jumping 5.6 times to Rs5.6 billion from Rs1 billion in FY24's first quarter, attributed to improved margins from deregulated non-essential products and reduced finance costs.

Other sectors like refinery, oil marketing companies (OMCs), textiles, and oil and gas exploration reported year-on-year profit declines of 142%, 86%, 60%, and 21%, respectively. The technology sector registered a Rs1.4 billion loss, largely due to Pakistan Telecommunication Company's (PTC) performance.

In total, the 95 companies announced cash dividends amounting to Rs106 billion for shareholders in the quarter, a 3% increase from Rs104 billion in the same quarter last year. This reflects a 26% dividend payout ratio for the quarter, up from 22% in the same period last year, though down from 70% in the previous quarter.

Notably, the payout ratio in the oil and gas exploration sector rose to 21%, up from 6% YoY, driven by improved cash flow from rising gas prices. Similarly, the banking sector's payout ratio increased from 36% in Q1 FY24 to 38% in Q1 FY25. The banking sector remained the largest contributor with dividends announced at Rs59 billion followed by oil and gas exploration (Rs18 billion), and fertilisers (Rs6 billion).