KARACHI: The profits of the companies listed on the Pakistan Stock Exchange (PSX) fell one per cent to Rs1.62 trillion in 2024 from Rs1.64tr in 2023, according to a research report by Topline Securities Ltd.
In US dollar terms, the profitability stood at $5.8bn, down 1pc year-on-year in 2024. However, excluding the exploration and production (E&P) sector, the profitability of KSE 100 companies improved by 8pc year-on-year to Rs1.25tr in 2024.
The report, authored by Tanweer Ahmed, said the profitability of the E&P sector declined by 24pc year-on-year to Rs364bn in 2024 due to a decline in oil prices and a reduction in oil and gas production.
The banking sector’s earnings increased by 6pc year-on-year to Rs593bn (37pc of the total KSE-100 index profitability) in 2024. A rise in net interest income and non-interest income primarily drove this growth.
The fertiliser sector recorded a 79pc year-on-year jump in earnings to Rs177bn (11pc of total KSE-100 index profitability) in 2024, primarily due to higher urea and DAP prices, which rose by 39pc and 9pc, respectively. However, urea sales declined by 1pc during the year.
The report noted that the cement sector’s earnings surged 30pc to Rs133.5bn in 2024 mainly due to higher retention prices, lower coal cost and efficient power mix despite reduced local offtake.
The automobile sector also showed a strong recovery, with earnings rising by 75pc year-on-year to Rs66.3bn. This recovery was driven by an increase in volumetric sales by 52pc amid declining interest rates, lower fuel prices and a pickup in economic activity.
The pharmaceutical sector witnessed a 3.4 times year-on-year growth in profitability to Rs15bn in 2024, compared to Rs4.4bn in 2023, primarily due to an improvement in margins following the deregulation of non-essential products and a decline in finance costs.
Other sectors like engineering, chemicals and textile recorded a decline of 81pc, 56pc and 38pc year-on-year, respectively, in earnings during 2024. The technology sector recovered as losses were reduced to Rs17bn in 2024 compared to losses of Rs24bn in 2023.
In 4Q2024, the KSE100 index recorded earnings of Rs438bn, up 1pc year-on-year. Excluding banks and E&P, profitability significantly improved by 40pc year-on-year in 4Q2024.
For analysis, the brokerage took 97 companies, which have announced their results out of 100 companies, representing 98pc of KSE-100 market capitalisation.
The KSE 100 index companies announced a cash dividend of Rs750bn (27pc year-on-year) in 2024 compared to Rs592bn in 2023.
This translates into a 46pc dividend payout in 2024 compared to 36pc in the preceding year.
The payout ratio of the E&P sector increased to 33pc in 2024, compared to 19pc in 2023, following an improvement in cash recovery due to the increase in gas prices.
The banking sector remained the largest contributor, with a dividend announced of Rs309bn in 2024, followed by E&P (Rs121bn) and fertilisers (Rs93bn).
Published in Dawn, April 3rd, 2025
