ISLAMABAD (ABC) — Pak Elektron Limited (PAEL) posted a remarkable 1,090% year-on-year (YoY) surge in net profit during the first quarter of the ongoing calendar year, clocking in at Rs444.9 million compared to a paltry Rs37.4 million in the same period last year, according to WealthPK.
The enormous profit growth was mainly driven by relaxed import restrictions and increased market stability.
| PAEL- Quarterly Operating Performance | |||
| Particulars | 1QCY23 | 1QCY24 | Percentage |
| Net sales | 8,141,354,000 | 12,717,942,000 | 56% |
| Cost of sales | 6,135,324,000 | 9,280,282,000 | 51% |
| Gross profit | 2,006,030,000 | 3,437,660,000 | 71% |
| Profit before tax | 172,882,000 | 1,040,180,000 | 502% |
| Net profit | 37,407,000 | 444,997,000 | 1090% |
| Earnings per share | 0.03 | 0.51 | 1600% |
Furthermore, the company’s gross profit and profit-before-tax also witnessed a substantial increase of 71% and 502%, respectively, during 1QCY24.
The revenue during the first quarter experienced an increase of 56%, registering at Rs12.7 billion compared to Rs8.1 billion in the same period of last year. The growth was mainly driven by an 86% rise in appliance sales volume and a 44% increase in the power division’s sales volume.
On the expense side, the company observed a rise in administrative and distribution costs mainly due to an increased freight cost resulting from the higher sales volumes in the appliance’s division.
Pattern of shareholding
As of December 31, 2023, PAEL had a total of 856 million shares outstanding, held by 10,799 shareholders. The general public held the largest portion at 48%, followed by the company’s directors, the CEO, their spouses, and minor children, who together owned 31% of the shares. Furthermore, the insurance and foreign companies held 7% and 6% of outstanding shares. The remaining ownership is distributed among other categories of shareholding: Modarabas, pension funds, and investment companies.
Financial performance (2019-23)
PAEL’s top line followed an upward trajectory from 2019 until 2022. Conversely, its bottom line took a plunge in 2022.
In 2020, the company’s sales and net profit saw a robust year-over-year increase of 29% and 26%, respectively. Three key developments significantly boosted the company’s sales and profitability: the merger of PEL Marketing Private Limited (PMPL) into PAEL, the launch of commercial operations at the company’s power transformer manufacturing facility, and a collaboration with Panasonic Marketing Middle East & Africa (PMMAF).
The year 2021 witnessed a 49% YoY increase in net sales, which clocked in at Rs42.8 billion. Furthermore, the net profit expanded by a huge 611% to reach Rs1.5 billion with earnings per share standing at Rs2.89 – the highest among all the years under consideration.
| PAEL-Historical Performance | |||||
| Particulars | 2019 | 2020 | 2021 | 2022 | 2023 |
| Sales | 22,349,749,000 | 28,799,018,000 | 42,887,364,000 | 52,386,178,000 | 38,685,112,000 |
| Net profit | 177,842,000 | 223,849,000 | 1,591,076,000 | 1,067,467,000 | 1,325,089,000 |
| EPS | 0.27 | 0.36 | 2.89 | 1.33 | 1.50 |
PAEL’s top line grew by 22% YoY in 2022. This was on the heels of a rise in power division revenues. However, the higher finance costs along with the implementation of additional taxes constricted PAEL’s bottom line by 33%. EPS stood at Rs1.33.
In 2023, the company’s net sales dwindled by 26% YoY due to sluggish industrial activities, import restrictions, and reduced consumer purchasing power. However, the limited supplies enabled the company to take advantage and pass the onus of high raw material costs and rupee depreciation to its consumers. As a consequence, PAEL’s net profit grew by 24% in CY23 compared to CY22.
About the company
PAEL was incorporated in Pakistan as a public limited company in 1956. The company is engaged in the manufacturing and sale of domestic appliances and electrical capital goods. It operates through power and appliances divisions. The power division manufactures and sells transformers, switchgear, and energy meters, as well as engages in engineering, procurement, construction and contracting activities.
The appliances division manufactures, assembles, and distributes refrigerators, deep freezers, air conditioners, microwave ovens, LED televisions, washing machines, water dispensers, and other home appliances.
Industry overview
The large-scale manufacturing output increased by 2.04% for March 2024 compared with March 2023 but decreased by 9.35% from February 2024.