KSE-100 Companies Post Earnings of Rs. 1.62 Trillion in 2024

KSE-100 index companies posted earnings of Rs. 1.62 trillion in 2024, down 1 percent YoY from Rs. 1.64 trillion in 2023. In US dollar terms, profitability stood at US$5.8 billion, down 1 percent YoY in 2024. Excluding E&Ps, profitability improved by 8 percent YoY to Rs. 1.25 trillion in 2024, Topline Securities said in a market review. The profitability of E&Ps declined by 24 percent YoY to Rs. 364 billion in 2024 due to a decline in oil prices and a reduction in oil and gas production. The banking sector’s earnings increased by 6 percent YoY to Rs. 593 billion (37 percent of the total KSE-100 index profitability) in 2024. This growth was primarily driven by an increase in both Net Interest Income (NII) and Non-Interest Income. The fertilizer sector recorded a 79 percent YoY jump in earnings to Rs. 177 billion (11 percent of total KSE-100 index profitability) in 2024, primarily due to higher Urea and DAP prices, which rose by 39 percent and 9 percent, respectively. However, Urea sales declined by 1 percent during the year. The cement sector’s earnings surged to Rs. 133.5 billion up 30 percent YoY in 2024, mainly due to higher retention prices along with lower coal costs andan  efficient power mix despite lower local offtake. The automobile sector also showed a strong recovery, with earnings rising by 75 percent YoY to Rs. 66.3 billion. This recovery was driven by an increase in volumetric sales by 52 percent amid declining interest rates, lower fuel prices, and a pickup in economic activity. The pharmaceutical sector witnessed a 3.4x YoY growth in profitability to Rs. 15 billion in 2024, compared to Rs. 4.4 billion 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 declines of 81 percent, 56 percent, and 38 percent YoY, respectively, in earnings during 2024. Meanwhile, the Technology sector recovered as losses were reduced to Rs. 17 billion in 2024 vs. losses of Rs. 24 billion in 2023. In 4Q2024, the KSE-100 index recorded earnings of Rs. 438 billion, up 1 percent YoY. Excluding Banks and E&Ps, profitability significantly improved by 40 percent YoY in 4Q2024. Topline took 97 companies out of the total 100 companies (that have announced their results), which represents 98 percent of KSE-100 market capitalization. The brokerage estimated that adding the remaining companies of the Index would not materially impact the profitability growth trend. KSE-100 index companies announced a cash dividend of Rs. 750 billion (+27 percent YoY) in 2024 compared to Rs. 592 billion in 2023. This translates into a 46 percent dividend payout in 2024 vs. last year’s 36 percent. The payout ratio of the E&P sector increased to 33 percent in 2024, compared to 19 percent in 2023, following an improvement in the cash recovery of companies due to the increase in gas prices. The banking sector remained the largest contributor with a dividend announced of Rs. 309 billion in 2024, followed by E&Ps (Rs. 121 billion) and Fertilizers (Rs. 93 billion). United Bank (UBL) remained the largest contributor in the banking sector with the contribution of Rs. 54 billion, followed by Meezan Bank (MEBL) of Rs. 50 billion and MCB Bank (MCB) of Rs. 42.6 billion. Within E&P sectors, Oil & Gas Development Company (OGDC) announced a dividend of Rs. 56 billion, followed by Pakistan Oil Fields (POL) of Rs. 27 billion, Pakistan Petroleum (PPL) of Rs. 20.4 billion, and Mari Energies (MARI) of Rs. 17.8 billion. In fertilizer space, Fauji Fertilizer (FFC) remained the largest contributor of Rs. 49.6 billion, followed by Engro Fertilizers (EFERT) of Rs. 28.7 billion and Fatima Fertilizer (FATIMA) of Rs. 14.7 billion, respectively. The Hub Power (HUBC) announced a cash dividend of Rs. 20.7 billion, followed by Kot Addu Power (KAPCO) of Rs. 7.5 billion, Nishat Power (NPL) of Rs. 3.8 billion and Nishat Chunian Power (NCPL) of Rs. 1.8 billion. Unilever (UPFL) remained the largest contributor of Rs. 11.9 billion, followed by Nestle Pakistan (NESTLE) of Rs. 7.5 billion. Indus Motor (INDU) led the sector with total dividend announced at Rs. 12 billion, followed by Millat Tractors (MTL) of Rs. 8.6 billion, Atlas Honda (ATLH) of Rs. 7.6 billion and Sazgar (SAZEW) of Rs. 2.4 billion. Bestway Cement (BWCL) declared a dividend of Rs. 17.9 billion in 2024, along with Lucky Cement (LUCK) of Rs. 4.3 billion, Pioneer Cement (PIOC) of Rs. 3.4 billion, Fauji Cement (FCCL) of Rs. 2.4 billion, and Cherat Cement (CHCC) of Rs. 1.06 billion, respectively.