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Outflow of profits, dividends falls 27pc in Jul-May

Business

July 4, 2020

KARACHI: Outflow of profits and dividends on foreign investments fell 27.37 percent to $1.215 billion in 11 months of the 2019/20 fiscal year, largely on account of virus lockdown-led sluggish economic activities, the central bank’s data showed on Friday.

Profits and dividends worth $1.673 billion were repatriated in the corresponding period of previous year. The country paid $20.2 million as profits and dividends in May, compared to $190.4 million in April.

This drop is attributed to the slowdown in the profit margins of the various companies operating in Pakistan. Moreover, depreciation in the rupee also led to the decrease in repatriated earnings of multinational companies in July-May FY2020 period. The payments on foreign direct investments (FDI) stood at $1.077 billion in the period, compared with $1.445 billion a year earlier. The payments on foreign portfolio investments were $137.6 million. That compared with $228.0 million in the same period last year.

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

Food sector repatriated $59.3 million in July-May, compared with $177.6 million in the same period last year. The power sector repatriated $68.8 million worth of profits, whereas it had repatriated $129.7 million last year. Outflow of profits from telecommunications amounted to $65.8 million during the period under review. These outflows stood at $256.5 million in the corresponding period last year. Financial businesses repatriated $232.7 million profits in 11 months of the 2019/20 fiscal year, compared with $251.1 million in the same period last year.