Hifsa Raja

The Pakistan Stock Exchange Limited (PSX) reported a dynamic financial performance in the fiscal year’s first three quarters, showcasing a notable turnaround in its profitability, reports WealthPK. After a challenging start in the first quarter of FY23, marked by a negative operating profit, the PSX rebounded impressively with a surge in gross profit in the subsequent quarters. The latest financial figures indicate a significant shift in the exchange’s fortunes, as it not only recovered from losses but also generated substantial profits by the end of the third quarter.

This financial upswing comes against the backdrop of evolving market dynamics and economic factors that have influenced PSX’s operations. In the first quarter (July-Sept) of FY23, the PSX posted a gross profit of Rs180 million, profit before tax of Rs55 million and net loss of Rs54 million.

In the second quarter (Oct-Dec), the company posted a gross profit of Rs372 million, profit before tax of Rs123 million and net income of Rs104 million. In the third quarter (Jan-March), the company posted a gross profit of Rs367 million, profit before tax of Rs25 million and a net income of Rs34 million. The quarterly figures underline the PSX’s responsiveness to market shifts and its commitment to navigate challenges.

The company’s capability to rebound from losses and achieve profitability reaffirms its resilience. Despite the roller-coaster trends, these results suggest a strategy of adaptability and prudent management to secure growth opportunities even in a volatile landscape.

Financial performance

In FY2021-2022, the company reported an increase in net revenue, reaching Rs681 million compared to Rs554 million in the previous year, indicating a growth of 75%. However, the operating profit stood at Rs27 million, up by 91% from the previous year’s figure of Rs92 million.

The company’s profit before tax decreased by 36%, which was Rs460 million in FY22, as compared to the previous year’s profit of Rs722 million. Moreover, the company’s profit-after-tax decreased by 5% from Rs398 million in FY22 compared with the previous year’s profit of Rs696 million.

The PSX’s financial performance over the past four years reveals a consistent growth trajectory, indicating its resilience and strategic insight in navigating the evolving healthcare landscape. The PSX’s consistent growth in total income from 2019 to 2021 suggests a well-executed business strategy. The financial data for 2019 through 2022 paints a picture of consistent growth and success for the company.

The substantial increase in total income and profits after taxation from 2019 to 2021 signifies effective strategic decisions, successful market penetration, and strong financial management. The slight dip in 2022 could be attributed to a variety of factors, including changing market conditions, increased competition, or internal operational adjustments.

Earnings per share

The PSX has showcased varying trends in its earnings per share (EPS) and growth rates over the past four years, reflecting a complex interplay of factors shaping the company’s financial performance. The company began the four-year period in 2019 with an EPS of Rs0.11, indicating modest earnings. However, by the end of 2020, it almost doubled to Rs0.24, suggesting a significant improvement in profitability. In 2021, the company experienced an extraordinary surge in EPS, reaching Rs0.87.

This remarkable increase of 262.50% suggests a substantial boost in profitability. However, the trajectory took a sudden and sharp downturn in 2022, with EPS dropping to Rs0.50. The growth percentages associated with the EPS reveal intriguing patterns. The year 2019 saw a moderate EPS growth of 37.50%, indicating a steady start. This growth took a dramatic leap in 2020, with EPS growth of 118.18%, suggesting the company was making remarkable strides in enhancing its earnings potential.

The pinnacle of this growth was reached in 2021 when the EPS growth skyrocketed to 262.50%, signifying a transformative year for the company’s financial performance. However, the tables turned in 2022, with an alarming negative EPS growth of -42.53%. Such a sharp decline can indicate serious challenges that impacted the company’s revenue and profitability. To fully comprehend the reasons behind this decline, a comprehensive assessment of the company’s financial statements, market conditions, and industry trends would be necessary.

The Pakistan Stock Exchange Limited’s financial journey from 2019 to 2022 has been a tale of remarkable ups and downs. The fluctuating EPS figures indicate a company that experienced significant growth, hit new peaks, and then faced unexpected setbacks.

MOU

In the tech sector, an MoU was signed with the Pakistan Software Export Board (PSEB) whereby they would cover 70% of the costs of listing tech companies opting to list on the GEM Board of PSX. The partnerships were developed with various organizations, including Small & Medium Enterprises Development Authority (SMEDA) and National Incubation Center (NIC), to promote GEM listings. T

he PSX joined the Sustainable Stock Exchanges (SSE) Initiative to build capacity for the promotion of responsible investment in sustainable development, signed an agreement for market data services, and held the World Investor Week in collaboration with the World Federation of Exchanges (WFE) of which PSX is an affiliate exchange. Numerous investor and issuer awareness sessions, as well as gong ceremonies, were held.

Company profile

The Pakistan Stock Exchange Limited was originally established under the Companies Act, 1913, in 1949 as a Company Limited by Guarantee. However, in 2012, it transitioned to a public company limited by shares. The PSX’s core activities involve regulating and conducting the trade of various financial instruments, including shares, bonds, government papers, and more. It acts as a vital hub for trading and investment activities within Pakistan’s financial markets.

Credit: INP-WealthPk