Pakistan’s top-listed companies recorded combined earnings of Rs. 1.62 trillion in 2024, reflecting a marginal decline of 1 percent compared to Rs. 1.64 trillion in 2023, according to a market review released by Topline Securities.
When measured in US dollar terms, profitability stood at $5.8 billion, also down 1 percent from the previous year. However, excluding the energy exploration and production (E&P) sector, corporate profits actually improved by 8 percent to Rs. 1.25 trillion.
The E&P sector saw a significant 24 percent decline in earnings to Rs. 364 billion, primarily due to lower oil prices and reduced oil and gas production throughout the year.
Banking emerged as the strongest performing sector, with earnings increasing by 6 percent to Rs. 593 billion, accounting for 37 percent of the KSE-100 index’s total profitability. This growth was driven by increases in both Net Interest Income and Non-Interest Income.
The fertilizer sector recorded impressive growth with a 79 percent jump in earnings to Rs. 177 billion, fueled by higher urea and DAP prices, which rose by 39 percent and 9 percent respectively, despite a slight decline in urea sales volume.
Cement companies also performed strongly, with earnings rising 30 percent to Rs. 133.5 billion, benefiting from higher retention prices and lower coal costs despite reduced local demand.
The automobile sector showed remarkable recovery with a 75 percent increase in earnings to Rs. 66.3 billion, driven by a 52 percent rise in sales volume amid declining interest rates, lower fuel prices, and improved economic activity.
Pharmaceuticals witnessed the most dramatic improvement, with profits surging 3.4 times to Rs. 15 billion, up from Rs. 4.4 billion in 2023. This growth followed the deregulation of non-essential products and reduced finance costs.
Not all sectors performed well, however. Engineering, chemicals, and textile companies recorded significant declines of 81 percent, 56 percent, and 38 percent respectively. The technology sector showed some improvement by reducing losses to Rs. 17 billion from Rs. 24 billion in 2023.
In the fourth quarter of 2024, KSE-100 companies posted earnings of Rs. 438 billion, up 1 percent year-on-year. Excluding banks and E&Ps, fourth-quarter profitability improved by a substantial 40 percent.
Corporate dividends increased significantly, with KSE-100 companies announcing cash dividends totaling Rs. 750 billion, up 27 percent from Rs. 592 billion in 2023. This represents a payout ratio of 46 percent compared to 36 percent in the previous year.
The banking sector led dividend distributions with Rs. 309 billion, followed by E&Ps (Rs. 121 billion) and fertilizers (Rs. 93 billion). United Bank was the largest contributor in banking with Rs. 54 billion, while Oil & Gas Development Company led the E&P sector with Rs. 56 billion in dividends.
Topline Securities noted that its analysis covered 97 of the 100 KSE-100 companies, representing 98 percent of the index’s market capitalization, and estimated that including the remaining companies would not materially impact the overall profitability trend
