Foreign firms repatriate $359.4 million profits in July-September

KARACHI: Foreign companies repatriated $359.4 million in profits and dividends from Pakistan during the first quarter of the current fiscal year of 2015/16, an indication that they are enjoying robust profitability.
The State Bank of Pakistan’s (SBP) data showed on Monday that the amount was 52.61 percent higher than $235.5 million in the corresponding period of the last fiscal year.
Analysts said that foreign companies are witnessing growth in earnings. The higher repatriation of profit and dividends show the growth in corporate earnings and resilient payouts.
“In Pakistan, companies pay biggest dividend yields and payouts,” said analyst Ahsan Mehanti at Arif Habib Corp.
But, “This also suggests that the economy is still uncertain that’s why instead of going for expansion the multinationals are pulling out their investment from the country and offering higher payouts to their shareholders,” Mehanti added.
In September alone, businesses sent $216.2 million worth of overseas earnings back to their headquarters.
Oil and gas sector repatriated the largest amount of $70 million to their shareholders/sponsors in foreign countries in July-September 2015/16 as compared to $50.7 million in the same period last fiscal year.
Mehanti said the rising pace is unlikely to sustain on account of slowdown in earnings of the oil companies.
“Slump in oil and natural gas prices since last year has driven major global oil companies into losses,” he said.
“Likewise, local listed exploration and production (E&P) companies also witnessed the same trend, as their profits stood almost half compared to the last year.”
Total sales of three KSE-listed E&P companies dropped 33 percent to Rs70.8 billion ($681 million) in the first three months as Arab light crude, which is used as the benchmark for pricing of local E&P companies, was lower by an average 48 percent over the same period last year.
Pakistan’s net foreign direct investment amounted $216.2 million in July-September 2015/16.
The SBP data showed that the repatriated profits of the financial sector were $66.8 million in the first three months of the current fiscal year compared with $61.9 million a year ago.
The repatriated profits of the telecommunication sector were $32.5 million as against $13.9 million.
The power sector’s share in the repatriated profits in July-September 2015/16 was $53.3 million as against $26.5 million in the comparable period.
Other sectors were beverages ($42.5 million), transport equipment ($28.5 million) and food ($14.1 million), showed the data.