KARACHI: Pakistani consumer companies listed at the Pakistan Stock Exchange (PSX) recorded an increase of 42 per cent in their profits on a year-on-year basis during the third quarter of 2021, a Topline Securities research report revealed on Thursday.
The net revenues of consumer companies increased 40 per cent on a year-on-year basis due to low base of the last year, amid Covid-19 lockdowns, and general macroeconomic recovery.
The gross margins during the quarter clocked-in at 20 per cent, as it declined 119 basis points on a year-on-year basis, which is largely driven by higher commodity prices, currency depreciation and general inflationary environment.
The discretionary segment posted the significant growth of 129 per cent on a year-on-year basis to reach Rs9 billion on the back of higher net sales of 71 per cent on a year-on-year basis in the third quarter of 2021, which was affected the most in the same period last year due to the Covid-19-related lockdowns.
Higher sales were mainly attributable to improvements in car and appliances sales led by improvement in macroeconomic conditions and lower interest rates. The gross margins of the segment slightly improved to 9.3 per cent in the third quarter of 2021, compared with 8.4 per cent during the same period of the last year due to lower per unit fixed cost for auto assemblers.
Staple companies’ profits improved 22 per cent on a year-on-year basis during the period on account of improvement in the net sales by 23 per cent, driven by strong demand coupled with higher prices.
However, the gross margins declined to 28 per cent in the third quarter of 2021 from 30 per cent in the third quarter of 2020, mainly attributable to higher raw material and commodity prices.
Pakistan Tobacco witnessed an increase of 28 per cent on a year-on-year basis and Nestle Pakistan recorded a growth of 43 per cent on a year-on-year basis.
The pharmaceutical companies’ profits increased 17 per cent on a year-on-year basis with the net sales rising 14 per cent on the back of healthcare awareness across the market in the backdrop of the Covid-19 outbreak.
The gross margins of the segment declined to 36.4 per cent in the third quarter of 2021 from 38.6 per cent in the same quarter of 2020, mainly due to higher raw material prices and currency depreciation.
Improvement in profits were led by Searle with a 40 per cent increase on a year-on-year basis and Abbott Laboratories, recording a growth of 23 per cent on a year-on-year basis, while AGP Limited (AGP) witnessed a negative change of 40 per cent during the period under review.