NBP posts 72 percent jump in annual profit, holds off dividend

KARACHI: National Bank of Pakistan (NBP), one of the country's largest lenders, on Thursday posted a 72 percent surge in annual profit after tax, driven by a sharp rise in interest income.

NBP reported a profit after tax of Rs53.32 billion for the calendar year 2023, up from RS30.95 billion in the previous year, according to a notice sent to the Pakistan Stock Exchange. Earnings per share rose to Rs24.96 from Rs14.49, the bank said, adding that its board did not recommend any cash dividend.

The bank attributed the strong performance to a nearly 104 percent increase in mark-up/return earned, which reached Rss1,025.13 billion in 2023, compared to Rs503.58 billion in 2022.

The net mark-up/return earned jumped 45 percent to Rs169.36 billion, while its fee and commission income rose 7 percent to Rs24.14 billion.

The foreign exchange income, however declined 7 percent to Rs7.7 billion , and its operating expenses increased 20 percent to Rs95.45 billion.

The NBP also recorded a 294 percent gain on securities of Rs4.42 billion, and a Rs227 percent increase in share of profit from joint venture and association of Rs1.47 billion.

The profit before tax stood at Rs103.3 billion, up 62 percent from the previous year. Maintaining its leading market position, the bank achieved Rs6.5 trillion milestone in its balance sheet that grew 27 percent to reach Rs6,652.7 billion from Rs5,240.4 billion at the end of 2022," NBP said in a statement. "This makes NBP the largest bank in Pakistan in terms of total assets."

The statement said bank's board "deliberated at length whether or not cash dividend should be recommended". "However, the likely impact of the pension case and other contingencies, still remains a cause of concern for the board. Accordingly, the board considered it prudent to retain the profits for the time being and once the position becomes clearer, the bank may consider declaration of dividend at a later stage."

IMC posts 88.6 percent profit rise despite sales slump

Indus Motor Company Limited (IMC), the maker of Toyota cars in Pakistan, reported an 88.6 percent jump in profit after tax for the six months ended December 31, 2023, despite a sharp drop in sales and production due to weak demand and supply chain disruptions.

The company posted a profit after tax of Rs4.96 billion #, up from Rs2.63 billion in the same period a year earlier, according to a statement issued on Thursday.

The net sales turnover decreased by 41.4 percent to Rs50.91 billion, as compared to Rs86.83 billion for the same period last year. The company's overall market share for the quarter stood at 18 percent.

The earnings per share of the company for the half year ended December 31, 2023, was Rs63.07, in comparison to of Rs33.43 in the same period last year.

The board of directors declared a second interim cash dividend of Rs13.20 per share. This is in addition to the first interim cash dividend of Rs24.5 per share already paid.

The combined sales of CKD and CBU vehicles decreased by 61 percent to 7,324 units compared to 18,672 units sold in the previous year. Vehicle production too decreased by 66 percent to 6,391 units as compared to 18,562 units produced in the same period last year.

The decline in production was mainly due to weak consumer demand and vendor supply chain limitations, which led to regular plant shutdowns during the period, the company said.

"The country's economy continues to grapple with high fiscal deficit, sky rocketing inflation and power tariff hikes. Customer traffic at dealerships remained lackluster, owing to several factors, such as higher duties and taxes, high interest rates, low auto financing availability and relatively dampened consumer purchasing power," IMC Chief Executive, Ali Asghar Jamali, said in the statement.

He added that supply chain challenges continued to adversely affect the auto sector, as a consequence of which, it operated at below 30 percent production capacity, the lowest in the last decade, leading to forced frequent plant shutdowns.

Jamali also said that the company faced challenges in maintaining a level playing field within the automotive sector due to consistent rise in duties and taxes for locally manufactured vehicles while on the other hand, the government relaxed the import and taxation regime for used cars, thereby emphasizing the need for fair competition.

"Despite all the challenges, I am hopeful that with the new government in place, the country and the overall business environment shall well be on its path to stability, In Sha Allah," he said.

SPL posts 122 percent jump in half-year profit

Security Papers Limited (SPL) reported a 122 percent surge in its net profit for the first half of the financial year ending December 31, 2023, boosted by higher sales and improved margins.

The company said its profit after tax rose to Rs746 million, or Rs12.59 per share, in the six months ended June 30, 2023, from Rs336 million, or Rs5.67 per share, in the same period last year. Its revenue increased by 38 percent to Rs3.49 billion from Rs2.53 billion a year earlier.

The company's gross profit margin improved to 28 percent from 19 percent in the same period last year, as its cost of sales grew by 26 percent to Rs2.51 billion from Rs1.99 billio.

SPL chairman Mohammad Aftab Manzoor attributed the strong performance to the company's strategic focus on operational efficiency and cost reduction, as well as the positive impact of several reforms introduced in the company.

“Our strategic vision and relentless focus on new initiatives and diversification has more than doubled the EPS of the company. The SPL’s strong performance is a testament to its commitment to progress aimed at delivering value to shareholders and customers,” he said in a statement.

Manzoor also expressed confidence in the future prospects of the company, citing a recently signed technical consultancy agreement with a leading European security paper company that will help SPL benchmark its operational efficiencies and prepare comprehensive efficiency and cost improvement plans. The company also announced an interim cash dividend of Rs2.5 per share.