Pakistan Tobacco Company’s Profit Up 13.5% to Rs. 21.3 Billion in 2022

Pakistan Tobacco Company Limited (PSX: PAKT), the biggest cigarette manufacturer in the country, announced its financial results for the calendar year (CY) that ended on December 31st, 2022.

The company posted a profit after tax (PAT) of Rs. 21.3 billion, up 13.5 percent from Rs. 18.8 billion in CY21.

The gross turnover of the company increased to Rs. 232.6 billion, up by 88.4 percent as compared to Rs. 199.46 billion recorded in the same period last year. The company paid over Rs. 103 billion in excise duties with over Rs. 34 billion in sales tax.

Net sales of the company arrived at Rs. 94.8 billion in CY22, up by 26.5 percent YoY, as compared to Rs. 74.9 billion in the same period last year. The company posted a gross profit of Rs. 45.1 billion during the period, against Rs. 35.9 billion last year.

PAKT’s finance cost jumped by 19.5 percent from Rs. 274.3 million to Rs. 327.7 million during the period in review. Meanwhile, the other income of the company decreased by 8.3 percent YoY in CY22 to Rs. 663.8 million compared to Rs. 724.1 million in CY21.

Administrative expenses showed a small increase from Rs. 3.9 billion to Rs. 4 billion during the period in review, while other operating expenses clocked in at Rs. 3.3 billion, up by 55 percent from Rs. 2.13 billion in CY21.

The tobacco maker paid Rs. 13.4 billion in income tax during the period, 82.6 percent more than the Rs. 7.3 billion paid the previous year.

Earnings per share of PAKT were reported at Rs. 83.45 in CY22 as compared to Rs. 73.83 during the same period of the previous year.

At the time of filing, the company’s scrip at the bourse was at Rs. 750 down 3.85 percent or Rs. 30 with a turnover of 2,650 shares on Thursday.

New IMF Taxes Likely to Cut Earnings As Cigarette Prices Double

Local brands registered with PAKT are now retailing at much higher rates due to excise-led price increases under the government’s recent implementation of the Rs. 170 billion mini-budget. A packet of 20 Dunhill Switch cigarettes now costs Rs. 522.3 and retailers are selling it for Rs. 525-530 per pack.

Local favorites Dunhill Lights and Gold Leaf now cost Rs. 479 and Rs. 483 per pack, respectively. Embassy, which is a go-to brand for the hard-working labor segment of the country, now costs Rs. 212 per packet.

The industry has widened the per-packet price differentials by raising consumer rates significantly above the cost of the tax increase on its cigarette brands, making it extremely difficult for the smoking community to manage its usage. Many people are likely to downgrade to cheaper brands, or even quit smoking altogether, which will dent tobacco sector earnings during the ongoing calendar year.

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