June 28, 2021 (MLN): Multinational companies operating in Pakistan repatriated $1.496 billion in profit and dividends on investments in the country during the eleven months of FY21 which was 23% higher than the profits of $1.215 billion 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 May’21 alone, repatriation of profits and dividends on investment by the foreign firms increased by 9.1x YoY to $184.1 million, SBP data showed.

The data further revealed that during July-May FY21, foreign companies repatriated $1.38 billion worth of profit against the foreign direct investments (FDI) in various businesses compared to $1.07 billion in the same period last year. Moreover, profits on equity investments stood at $114.2 million compared to $137.6 million a year earlier, marking a decline of 17% YoY.

Sector-wise:

The data shows that the major sectors that repatriated relatively higher profits include Financial Businesses, Food, Communication sector, Transport sector, Tobacco & Cigarettes, Oil & Gas Exploration sector, and Chemicals among which Financial Businesses repatriated highest profits of $281.1 million during 11MFY21 to overseas, against $183.3 million in the corresponding period of last fiscal year, showing a growth of 37% YoY.

The data further revealed that profits outflow from the Food sector jumped by 3.93x YoY to $229.1 million against an inflow of $58.1 million in July-May FY20.

Profit outflows from the Communication sector jumped to $184.4 million from $73 million. The transport sector repatriated $130.2 million in July-May FY2021, which was 23% lower when compared with $169.2 million in the corresponding period of FY2020.

The Tobacco & Cigarettes segment repatriated $120.1 million in the first eleven months of FY21, compared with $35.1 million in the same period of FY20.

The Oil & Gas Exploration sector repatriated 53% lower profits during the period under review which amounted to $96.9 million, while in the corresponding period last year, the sector repatriated $215.7 million.

Similarly, the Chemical sector repatriated $92.2 million, which was 9% lower as they had sent $102.8 million during July-May FY20.

Country-wise:

A country-wise break up of data on repatriation of profit released by SBP revealed that firms and individual investors belonging to the United Kingdom dispatched the single largest profit of $506.7 million during 11MFY21 compared to $250.6 million in the same period the prior year.

The United States witnessed the repatriation of the second-highest profits as the country repatriated $194.8 million abroad during the period under review, compared with $134.7 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 remitted $38.5 million as profit income from Pakistan.

Next followed by Switzerland with profit repatriation of $76.2 million which was 11% lower when compared with last year figures.

Furthermore, companies from Hong Kong repatriated $73.9 million in 11MFY21 compared to $126.1 million in July-May FY20.

Firms from Norway repatriated $59.6 million in 11MFY21 compared to $3.5 million in July-May FY20.

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