In spite of a tumultuous year regarding the change in economic policy and local response to the spate of global demand-supply disturbances resulting from post-COVID jitters and Russia Ukraine war, the KSE-100 smashed its own record from the previous year to show all-time high earnings in FY22 to Rs. 1,021 billion.
According to Arif Habib Limiteds (AHL) report, profitability recorded a sound jump of 17 percent YoY, which remains notable given the scale of unrest during the year. The report also underlines that earnings could have been much higher in case the incumbent government had not imposed super tax growth on a PBT basis was a stunning 39 percent YoY during FY22.
The report shows the result of 83 companies, however, the remaining 17 companies have not disclosed their results yet. The companies which were included in the report signify around 90.4 percent of the market capitalization of the benchmark bourse.
The increase in earnings of the benchmark bourse in FY22 was led by the heavy-weight Commercial Banks sector, though modest at only 3 percent to Rs. 253 billion, was owed to the lagged impact of asset repricing post interest rate hike.
With increased oil prices and exchange gains booked amid PKR depreciation, the index-weighted Oil and Gas Exploration sector depicted an increase of 30% YoY to Rs. 246 billion.
Moreover, the cement sector also registered an earnings growth of a robust 28 percent YoY to Rs. 55 billion instead of higher retention prices during the year which balances the impact of volumetric decline (-8 percent YoY), higher coal prices, hike in energy tariffs and PKR depreciation.
The Automobile sector remained another cyclical benefitting from a huge jump in prices to pass on the effect of a sharp increase in steel prices as well as depreciation in the Pakistani Rupee (earnings growth of 5 percent YoY to Rs. 31 billion), along with volumetric growth.
Similarly, the profitability of the Chemical sector (+25 percent YoY to Rs. 39 billion) was supported by higher international margins coupled with PKR depreciation and volumetric growth (EPLCs expansion came online). The Textile Composite sector was also supported by a stronger USD (+83 percent YoY to Rs. 27 billion).