The consumer sector companies listed at the Pakistan Stock Exchange (PSX) recorded an increase of 92 percent in profits during the second quarter ended June 30, 2021.
According to a report issued on Wednesday, the consumer sector comprises discretionary, staples and pharmaceutical businesses.
Among them, the discretionary business posted the biggest recovery with Rs7 billion profits in the second quarter of 2021 against the loss of Rs968 million in the same period last year; followed by pharmaceuticals with 52 percent growth and staple with 29 percent growth in profits.
The net sales of all consumer companies increased 61 percent during the quarter under review, mainly due to the abnormally low sales last year, amid the Covid-19 lockdowns and improvement in the economic activities.
Saad Ziker at Topline Securities said the discretionary business witnessed a significant turnaround in profits on account of 223 percent higher net sales, as it was affected the most last year due to the Covid-19 lockdowns.
“Higher sales were mainly attributable to higher prices coupled with improvements in car and appliances sales, amid macroeconomic recovery.”
All companies recorded an increase in profits, with significant improvements seen in Indus Motor and Pak Elektron.
The staple sector companies’ profits improved 29 percent during the quarter. This came on the back of improvement in the net sales by 25 percent, which was driven by increased demand, introduction of new products and higher prices. “All companies, other than National Foods, recorded an increase in profitability with notable improvements witnessed in Rafhan Maize product and Nestle Pakistan.”
The profits of pharmaceuticals increased 52 percent with the net sales rising 25 percent given higher healthcare awareness in the backdrop of the Covid-19 outbreak. “Improvement in the profits were led by Searle Pharmaceuticals, while GlaxoSmithKline Consumer Healthcare and Abbott Pakistan also recorded strong profitability growths.”
During the second quarter of 2021, the overall consumer sector profits were marginally up 2 per cent on a quarterly basis with the pharmaceuticals (up 38 per cent QoQ) and discretionary (up 10 per cent QoQ), recording strong profitability growths. The profits of staple companies dropped 9 per cent on a quarterly basis.