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Listed companies earn Rs480 billion in nine months

By Our Correspondent
November 14, 2018

KARACHI: Companies listed on the benchmark KSE 100-share Index reported a 7.8 percent increase in their cumulative profits to Rs480.414 billion, led by fertiliser, oil and gas exploration and chemical sectors, a brokerage reported on Tuesday.

Fertiliser sector with 15.3 percent weight in the index recorded 90 percent surge in profitability. Oil and gas exploration sector with 14.6 percent weight registered a 27 percent rise in earnings. Chemicals having 1.9 percent weight in the index measured 19.1 percent increase in profit and power generation and distribution with 6.4 percent weight logged 14 percent improvement in bottom line, Arif Habib Limited said in a report analysing financials of the companies that represent around 97 percent of the market capitalisation.

Sectors leading the profitability chart during 9MCY18 included synthetic and rayon (1,056pc), textile spinning (169pc) and fertiliser (90pc).

Stress on the index profitability came from banking sector whose profitability was down 10 percent, oil and gas marketing companies (decreasing nine percent), cement (falling eight percent), and automobile assemblers (sliding 11 percent).

The KSE-100 index accelerated 1.3 percent or 526 points in January-September period with the bull-run, led by fertiliser (926 points), banks (712 points) and exploration and production sector (366 points). Cement and automobile assemblers wiped out 360 and 341 points, respectively from the index.

Banking sector that holds the highest 24.6 percent weight recorded a slide in profitability “due to hefty provisioning expenses booked primarily by United Bank Limited and National Bank of Pakistan, drastic uptick in operational expenditures faced by Habib Bank, and significantly lower capital gains,” Arif Habib Limited said.

Overall performance of mid-tier banks remained impressive, well-positioned to benefit from rising rates owing to low Pakistan Investment Bonds exposure and strong advances-to-deposits ratio while large banks’ earnings remained in stress.

Net interest income increased 7.3 percent in the January-September period as the central bank raised interest rates by 275 basis points to 8.5 percent since January.

Oil and gas exploration sector recorded a 39 percent year-on-year increase in profit to Rs49.9 billion in 1QFY19 attributable to higher average oil prices and rupee depreciation. Earnings of Oil and Gas Development Company, Pakistan Oil Field, Mari and Pakistan Petroleum Limited showed an upsurge of 57, 53, 42 and 12 percent, respectively

Fertiliser sector witnessed a massive 73 percent year-on-year increase in profitability during 3QCY18 to Rs12.808 billion while on quarterly basis, sector posted 49 percent quarter-on-quarter growth. During 3QCY18, urea offtake witnessed a decline of four percent year-on-year and five percent quarter-on-quarter to 1.41 million tons.