February 26, 2021 (MLN): Multinational companies operating in Pakistan repatriated $1.025 billion in profit and dividends on investments in the country during the seven months of FY21 which was 8% higher than the profits of $946.6 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 January’21 alone, repatriation of profits and dividends on investment by the foreign firms increased 21%YoY while declined by 8% MoM to $133.3 million, SBP data showed.
The data further revealed that during July-Dec FY21, foreign companies repatriated $961.6 million worth of profit against the foreign direct investments (FDI) in various businesses compared to $842.3 million in the same period last year. Moreover, profits on equity investments stood at $63.9 million compared to $104.2 million a year earlier, marking a decline of 39% YoY.
The data shows that the major sectors that repatriated relatively higher profits include Food, Financial Businesses, Communication sector, Transport sector, Tobacco & Cigarettes, Chemicals and Oil & Gas Exploration sector, among which Food Sector repatriated highest profits of $220.9 million during 7MFY21 to overseas, against $54.6 million in the corresponding period of last fiscal year, showing a massive growth of 304% YoY.
The data further revealed that profits outflow from Financial Businesses dipped by 13% YoY to $136.4 million against an outflow of $157 million in July-Jan FY20.
Profit outflows from the Communication sector jumped to $119.5 million from $33.2 million. The transport sector repatriated $106.3 million in July-Jan FY2021, which was 24% lower when compared with $139.7 million in the corresponding period of FY2020.
The Chemical sector repatriated $92.8 million, which was 6% lower as they had sent $98.3 million during July-Jan FY20.
The Tobacco & Cigarettes segment repatriated $84.7 million in the first seven months of FY21, compared with $36.3 million in the same period of FY20
Similarly, the Oil & Gas Exploration sector repatriated 58% lower profits during the period under review which amounted to $75.5 million, while in the corresponding period last year, the sector repatriated $181.3 million.
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 $361.8 million during 7MFY21 compared to $218.2 million in the same period the prior year.
The United States witnessed the repatriation of the second-highest profits as the country repatriated $195.2 million abroad during the period under review, compared with $144.3 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 $56 million which was 21% lower when compared with last year figures.
Furthermore, Chinese firms repatriated $50.7 million abroad during the period under study, compared with $92.8 million in 7MFY20, depicting a fall of 45% YoY.
Companies from Hong Kong repatriated $46.4 million in 7MFY21 compared to $119.4 million in July-Jan FY20.
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