March 29, 2022 (MLN): Repatriation of profit and dividends by foreign investors jumped by 9% YoY during the first eight months of this fiscal year (FY22), the central bank data showed on Tuesday.
The SBP data shows that multinational companies operating in Pakistan repatriated $1.14 billion in profit and dividends on investments in the country during the first eight months of the ongoing fiscal year which was 9% YoY higher compared to the profits of $1bn repatriated in the corresponding period last year.
The data further revealed that during the period, foreign companies repatriated $1.04bn worth of profit against the foreign direct investments (FDI) in various businesses compared to $985.8mn in SPLY. While the outflow as payment against portfolio investment stood at $108.6mn, compared with $1bn in the same period a year earlier, marking a significant growth of 68% YoY.
To note, the repatriation of profit on account of FDI is lower than overall FDI which amounted to $1.26 billion during the first eight months of this fiscal year.
Similarly, in the month of Feb’22 alone, repatriation of profits and dividends on investment by the foreign firms increased by 9% MoM and 5.3x YoY to $132.9mn, data showed.
Sector-wise:
The data shows that the major sectors that repatriated relatively higher profits include the Financial Businesses, Power, Food, Oil & Gas Exploration, Communication, and Chemical sector among which financial businesses repatriated the highest profits of $182mn during the period to overseas, against $136.6mn in the same period last fiscal year, showing a growth of 33% YoY.
The data further revealed that profit outflows from the Power sector clocked in at $124.9mn while during July-Feb FY21, the sector fetched a net $33.9mn as profit. Profits outflow from the Food sector decreased by 47% YoY to $116.3mn against an inflow of $220.9mn in 8MFY21.
The Oil & Gas Exploration sector repatriated $108.6mn during the period under review, which was 20% YoY higher when compared with $90.8mn in the same period previous fiscal year.
The Communication sector repatriated 11% lower profits during the period under review which amounted to $106mn, while in the same period of FY21, the sector repatriated $119.6mn.
The Chemical sector repatriated $73.9mn, whereas, in the corresponding period last year, the sector fetched $93.3mn as profits.
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 UK dispatched the single largest profit of $230mn during the period compared to $362.3mn in the same period prior fiscal year.
The United States witnessed the repatriation of the second-highest profits as the country repatriated $155.9mn abroad during the period under review, compared with $195.6mn in the previous year.
Third in line is Switzerland which repatriated $101.6mn from Pakistan during 8MFY22, up by 80% YoY as last year during July-Feb FY21, the country remitted $56.6mn as profit income from Pakistan.
Next followed by the Netherlands with profit repatriation of $90.1mn which was 5.1x YoY higher when compared with last year's figures.
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