close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

Profit, dividend repatriation fall 4.28pc to $1.004bln in July-March

Business

May 1, 2020

KARACHI: Outflow of profits and dividends on foreign investments from the country slightly fell 4.28 percent to $1.004 billion in the nine months of the current fiscal year, figures published from the State Bank of Pakistan showed on Thursday.

Repatriation of profits and dividends amounted to $1.049 billion in the same period last year.

The country paid $30.7 million as profits and dividends in March, compared with $27.3 million in previous month.

The decline in the profits and dividends from the foreign firms is driven by slowdown in their corporate earnings.

Moreover, sluggish economic activity and depreciation in exchange rate also contributed to the reduction in repatriated earnings of multinational companies in the period under review.

The payments on foreign direct investments (FDI) stood at $894 million in July-March FY2020, compared with $889 million a year earlier.

The payments on foreign portfolio investments were $109.9 million. That compared with $160.3 million in the same period last year.

The central bank’s data showed that some key sectors such as food, power and communications remitted lower profits to their parent companies abroad.

Food sector repatriated $55.1 million in July-March FY2020, compared with $86.3 million in the same period last year.

The power sector repatriated $66.2 million worth of profits, whereas it had repatriated $88.8 million profits last year.

Outflow of profits from telecommunications amounted to $26.3 million during July-March FY2020. The outflows were $71.6 million in the corresponding period last year.

The slowdown in repatriated earnings of foreign firms is a positive sign for the country’s current account deficit.

The decrease in profit repatriation by the foreign companies could provide relief to the current account balance in coming months.

“Primary income balance is likely to provide some respite, as dividend repatriation of E&Ps (exploration and production), IPPs (independent power producers) and foods sector to remain on lower side,” an analyst at Insight Securities said in a report published last month.

“Total dividend/profit repatriation during FY19 was recorded at $1.8 billion, of which oil exploration, financial business, foods and communication sectors constituted 14 percent, 15 percent, 10 percent and 17 percent, respectively.”