January 26, 2021 (MLN): Multinational companies operating in Pakistan repatriated $892.3 million in profit and dividends on investments in the country during the six months of FY21 which was 7% higher than the profits of $836.3 million repatriated in the corresponding period of last year. This was due to improved profitability and macroeconomic indicators which strengthened foreign investors’ confidence in Pakistan’s economy.
However, in the month of December alone, repatriation of profits and dividends on investment by the foreign firms decreased 13%YoY while jumped by a whopping 108% MoM to $144.2 million, SBP data showed.
The data further revealed that during July-Dec FY21, foreign companies repatriated $840.1 million worth of profit against the foreign direct investments (FDI) in various businesses compared to $743.2 million in the same period last year. Moreover, profits on equity investments stood at $52.2 million compared to $93.1 million a year earlier, marking a decline of 44% YoY.
Sector-wise:
The data shows that the major sectors that repatriated relatively higher profits include Food, Communication sector, Financial Business, Tobacco & Cigarettes, Transport, Oil & Gas Exploration sector and Chemical, among which Food Sector repatriated highest profits of $171.5 million during 6MFY21 to overseas, against $53.4 million in the corresponding period of last fiscal year, showing a growth of 221% YoY.
The data further revealed that profits outflow from Financial Businesses increased dipped 2% YoY to $122.5 million against an outflow of $125.5 million in July-Dec FY20.
Profit outflows from the Communication sector jumped to $119.3 million from $33 million. The transport sector repatriated $74.1 million in July-December FY2021, which was 47% lower when compared with $139.2 million in the corresponding period of FY2020.
The Tobacco & Cigarettes segment repatriated $76.5 million in the first six months of FY21, compared with $35.1 million in the same period of FY20.
The Oil & Gas Exploration sector repatriated $69.2 million, which was 38% lower as they had sent $111.8 million during July-Dec FY20.
Similarly, the Chemical sector repatriated 32% lower profits during the period under review which amounted to $46.8 million, while in the corresponding period last year, the sector repatriated $69.1 million.
Country-wise:
A country-wise break up of data on repatriation of profit/dividend released by SBP revealed that firms and individual investors belonging to the United Kingdom dispatched the single largest profit of $303.8 million during 6MFY21 compared to $155.7 million in the same period the prior year.
The United States witnessed the repatriation of the second-highest profits as the country repatriated $133.6 million abroad during the period under review, compared with $100.1 million in the corresponding period the previous year.
Third in line is Malta which repatriated $91.7 million from Pakistan during the period, while in the corresponding period last year, the country did not remit any profits or dividend income from Pakistan.
Next followed by Switzerland with profit repatriation of $53.4 million which was 12% lower when compared with last year figures.
Companies from Hong Kong repatriated $44 million in 6MFY21 compared to $98.9 million in July-Dec FY20.
Furthermore, Chinese firms repatriated $35.9 million abroad during the period under study, compared with $92.1 million in 6MFY20, depicting a fall of 61% YoY.
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