IPAK’s profits take a nosedive, down 62% YoY

February 25, 2025 (MLN): International Packaging Films Limited (PSX: IPAK) has reported a significant decline of 62% YoY in its profit after tax for the half-year ended December 31, 2024, as earnings dropped to Rs309 million, compared to Rs820mn in the same period last year.

The company's earnings per share (EPS) also decreased, standing at Rs0.81 compared to Rs1.36 in the previous year.

Despite a 61% YoY surge in revenue to Rs16.25 billion, the company's profitability took a hit due to soaring costs, with the cost of sales increasing by 86% YoY to Rs14.13bn, leading to a 15% decline in gross profit to Rs2.12bn.

Additionally, selling and distribution expenses more than doubled by 124% YoY, while administrative expenses surged by 57% YoY, further pressuring the bottom line.

Operating profit fell 20% YoY to Rs1.62bn, primarily due to rising costs and higher finance expenses, which jumped 42% YoY to Rs1.1bn, significantly impacting pre-tax earnings.

Consequently, profit before tax declined 61% YoY to Rs464.6mn, while income tax expense dropped 59% YoY to Rs155mn, resulting in a net profit after tax of Rs309.5mn.

The profit attributable to the owners of the holding company fell 34% YoY to Rs567.6mn, whereas non-controlling interest (NCI) showed a notable negative swing, recording a loss of Rs258mn against a loss of Rs37.6mn in SPLY.

This growth in the company’s revenue was primarily driven by the introduction of new capacities, which include a new product line and the expansion into export markets, with exports contributing $12mn in revenue during the period.

IPAK's major expansion projects are now fully operational, and management is focused on achieving maximum capacity utilization to unlock synergies that will enhance profitability and operational efficiency.  

Despite macroeconomic challenges, the company successfully sustained growth maintained margins, and outperformed the overall flexible packaging sector during the period.

IPAK collectively offers a complete portfolio of packaging solutions, producing BOPP, CPP, and BOPET films, making it the first-ever group in Pakistan to provide one-window flexible packaging solutions, located at two strategically important locations in the country.

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