Profit repatriation by overseas investors jumps 12% in 9MFY22

April 27, 2022 (MLN): Repatriation of profit and dividends by foreign investors jumped by 12% YoY during the first nine months of this fiscal year (FY22), the central bank data showed on Tuesday.

The SBP data shows that multinational companies operating in Pakistan repatriated $1.26 billion in profit and dividends on investments in the country during the first nine months of the ongoing fiscal year which was 12% YoY higher compared to the profits of $1.1bn repatriated in the corresponding period last year.

The data further revealed that during the period, foreign companies repatriated $1.15bn worth of profit against the foreign direct investments (FDI) in various businesses compared to $1bn in SPLY. While the outflow as payment against portfolio investment stood at $115.3mn, compared with $75.7mn in the same period a year earlier, marking a significant growth of 52% YoY.

To note, the repatriation of profit on account of FDI is lower than overall FDI which amounted to $1.29 billion during the first nine months of this fiscal year.

Similarly, in the month of March’22 alone, repatriation of profits and dividends on investment by the foreign firms decreased by 9% MoM and 53% YoY to $121.2mn, 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 Transport sector among which financial businesses repatriated the highest profits of $189mn during the period to overseas, against $165.8mn in the same period last fiscal year, showing a growth of 14% YoY.

The data further revealed that profit outflows from the Power sector clocked in at $178.4mn while during July-Mar FY21, the sector fetched a net $37.8mn as profit. Profits outflow from the Food sector decreased by 43% YoY to $126mn against an outflow of $220.9mn in 9MFY21.

The Oil & Gas Exploration sector repatriated $109.5mn during the period under review, which was 15% YoY higher when compared with $95.1mn in the same period previous fiscal year.

The Communication sector repatriated 10% lower profits during the period under review which amounted to $108.2mn, while in the same period of FY21, the sector repatriated $119.7mn.

The Transport sector repatriated $89.1mn, whereas, in the corresponding period last year, the sector fetched $106.5mn 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 $244.2mn during the period compared to $375.4mn in the same period prior fiscal year.

The United States witnessed the repatriation of the second-highest profits as the country repatriated $177.5mn abroad during the period under review, compared with $215.4mn in the previous year.

Third in line is Switzerland which repatriated $101.6mn from Pakistan during 9MFY22, up by 92% YoY as last year during July-Mar FY21, the country remitted $57.7mn as profit income from Pakistan.

Next followed by the Netherlands with profit repatriation of $92.7mn which was 4.4x YoY higher when compared with last year's figures.

Copyright Mettis Link News