Pakistan’s Leading Tin Can Manufacturer, Pakistan Aluminium Beverage Cans Ltd (PABC) reported a Profit After Tax (PAT) of PKR 1,372 million (EPS: PKR 3.80) in 2QCY23, demonstrating a 42% YoY increase compared to PKR 966 million (EPS: PKR 2.68) in the same period last year. Half Year 2023 Profit rose to PKR 2.7bn comapred to PKR 1.57bn in same period last year.
This rise in earnings can be attributed to the company’s strategic expansion plans and the favorable impact of PKR depreciation.
Key Highlights from the Results:
Revenue Growth: The company experienced a remarkable 53% increase in revenue, driven by expectations of higher exports following recent expansion efforts and the depreciation of PKR against USD. All sales are denominated in USD.
Gross Margins: PABC follows cost-plus margin pricing contracts with its customers, selling cans on fixed margins. The increase in sales volume likely contributed to higher gross margins.
Operating Costs: Administrative costs surged by 103% YoY, while selling costs increased significantly by 8.5 times YoY. This can be attributed to the company’s increased capacity and rising expenses related to freight and marketing for higher exports. The competitive nature of the export market may have led to these cost increases, although more details are needed from the company’s financial statements.
Finance Cost: Finance costs rose by 66% YoY, primarily due to increases in the KIBOR (Karachi Interbank Offer Rate).
Taxation: The company incurred an effective tax rate of 10% in 2QCY23, compared to 4.3% in 1QCY23, largely due to the super tax.
Dividend Announcement: PABC declared a dividend of PKR 3.50 per share, which was absent in the previous year. The company was in an expansion phase during the prior year, and the State Bank of Pakistan’s relaxation of the 100% cash margin requirement for imports likely contributed to this dividend announcement.
| PKR in Million | 2QCY23 | 2QCY22 | YoY | 1HCY23 | 1HCY22 | YoY |
| Revenue | 5,941 | 3,886 | 53% | 11,120 | 6,510 | 71% |
| Cost of Sales | (3,580) | (2,431) | 47% | (6,714) | (4,191) | 60% |
| Gross Profit | 2,361 | 1,455 | 62% | 4,406 | 2,319 | 90% |
| Administration Expenses | (129) | (63) | 103% | (260) | (136) | 92% |
| Distribution & Selling exp | (636) | (75) | 8.53x | (736) | (140) | 5.26x |
| Other Income | 295 | 83 | 256% | 310 | 126 | 146% |
| Other Expenses | (190) | (240) | -21% | (460) | (286) | 61% |
| Finance cost | (170) | (103) | 66% | (328) | (198) | 65% |
| PST | 1,532 | 1,057 | 45% | 2,933 | 1,685 | 74% |
| Taxation | (160) | (91) | 75% | (219) | (108) | 103% |
| PAT | 1,372 | 966 | 42% | 2,715 | 1,577 | 72% |
| EPS | 3.80 | 2.68 | 7.52 | 4.37 | ||
| DPS | 3.50 | 0.00 | 3.50 | 0.00 |
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