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Pakistan Software Export Board signs MoU with Pakistan Stock...

February 25, 2021: In yet another major step towards ensuring sustainable growth of Pakistan’s IT Industry, Pakistan Software Export Board (PSEB) has signed a Memorandum of Understanding with Pakistan Stock Exchange (PSX).

The MOU was signed at Pakistan Stock Exchange. Mr. Osman Nasir, Managing Director, Pakistan Software Export Board and Mr. Mr. Farrukh H. Khan, Chief Executive Officer & Managing Director, Pakistan Stock Exchange signed the MOU. Senior Officials from the Federal Ministry of IT & T, Pakistan Software Export Board, Security & Exchange Commission of Pakistan, Pakistan Stock Exchange and IT Industry representatives were present at the occasion.

Osman Nasir, Managing Director PSEB said that the Company would work with Pakistan Stock Exchange to conduct seminars, workshops and events to create awareness of the benefits of listing for IT/ITeS companies and work with PSX authorized financial advisors, consultants  and lead managers to assist the selected IT/ITeS companies for listing. He said that the Company is aiming to have 40 technology companies registered on Pakistan Stock Exchange and would extend significant financial and technical assistance to the tech companies to get listed on Pakistan Stock Exchange.

Shoaib Ahmed Siddiqui, Secretary IT said that one of the main factors impeding the growth of Pakistan’s IT sector is access to capital. Pakistani Tech companies that get listed on Pakistan Stock Exchange would be able to raise funds by issuing shares which can subsequently be used for further business expansion.  By listing on the stock exchange, a company gains instant credibility and stature with the prospective clients and suppliers. This is a significant advantage particularly for Pakistani tech companies as it makes it easier to solicit overseas customers due to increased credibility that comes from being listed on Pakistan Stock Exchange. Listing on stock exchange also improves corporate governance and companies can maintain more autonomy and control through ability to rapidly raise low-cost capital compared to banks, venture capitalists or private investors.

Syed Amin Ul Haque, Minister for Information Technology & Telecommunication in his comments stated that the MOU is a giant leap forward for development of Pakistan’s IT Industry. This is the first ever MOU signed between PSEB and Pakistan Stock Exchange. The goal is to increase the number of listed technology companies on PSX Main Board & GEM Board which would in turn help to strengthen financial ecosystem for IT sector growth and contribute to efforts for building a strong brand image of Pakistan’s  IT industry in the international markets. Due credit goes to Security and Exchange Commission of Pakistan for reducing corporate governance rules from 21 to 3 and for making it easier for technology firms to register on PSX.

According to Pakistan Stock Exchange Managing Director, Farrukh Khan, “PSX’s Growth Enterprise Market (GEM) Board facilitates small and medium sized enterprises, greenfield projects and tech startups to get listed on the Stock Exchange and raise capital. The listing regulations for the GEM Board have been made flexible vis a vis the Main Board while listing costs are significantly lower. Furthermore, there is an expanded list of Advisors to choose from, which adds to the convenience of issuers”. Mr. Khan further stated, “The GEM Board of PSX provides an ideal opportunity for small to medium sized growth enterprises such as IT firms and tech start-ups to raise capital and expand their business horizon. These companies must capitalise on this opportunity and raise low cost capital through the Exchange, which is crucial for their expansion and outreach. At the same time, listing on the Exchange will attract attention to these companies, locally as well as internationally. Importantly, listing on the GEM and Main Board also provides a potential exit to investors. Such an exit avenue will make it easier for tech companies to raise venture capital”.

Small to medium enterprises make up a big chunk of business enterprises in Pakistan. SMEs constitute nearly 90% of all enterprises in Pakistan. They contribute about 40% to the annual GDP and employ about 80% of the non-agricultural labor force. The growth enterprises play a major role in a country’s economy. They provide a large number of jobs and contribute significantly to the GDP of a country.

Press Release

GTYR: Improved sales volume lifts profits by 13.8x

February 25, 2021 (MLN): General Tyre and Rubber Company (GTYR) has posted net profits of Rs 405.9 million during 1HFY21, which is 13.8x higher than the profits of Rs 29.29 million earned in the corresponding period last year.

This reflected in the company’s earnings per share as it jumped to Rs 3.33/sh compared to Rs 0.24/sh in 1HFY20.

The rise in profitability during the period was attributable to higher sales volume on account of growth in auto assemblers’ sales. The net revenues of the company rose significantly by 41% YoY on the back of improved sales volume of auto/tractor. The gross margin of the company also improved to 18% from 16% in the comparative period.

On the cost front, due to higher advertising and promotions, the company’s admin and distribution expenses surged by 4 and 20% YoY respectively.

While the finance cost of the company declined 46% YoY due to lower short-term borrowings coupled with low-interest rates.

Financial Results for the half-year ended December 31, 2020 (Rupees in '000)

 

Dec-20

Dec-19

% change

Sales-net

                             6,448,619

                                      4,564,320

41%

Cost of sales

                          (5,311,195)

                                    (3,811,685)

39%

Gross  profit

                             1,137,424

                                          752,635

51%

Administrative expenses

                              (143,890)

                                        (137,699)

4%

Distribution expenses

                              (246,108)

                                        (204,955)

20%

Other income

                                125,319

                                            68,548

83%

Other expenses

                                (54,249)

                                            (4,746)

1043%

Profit from Operations

                                818,496

                                          473,783

73%

Finance Cost

                              (233,961)

                                        (429,729)

-46%

 

                                584,535

                                            44,054

1227%

Share of (loss)/profit of an associated company

                                     3,533

                                                (589)

 

Profit before taxation

                                588,068

                                            43,465

1253%

Taxation

                              (182,139)

                                          (14,175)

1185%

Profit after taxation

                                405,929

                                            29,290

1286%

Earning per share-basic and diluted

3.33

0.24

1288%

 

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ICT & Telecom Services exports maintain growth, surge 38%...

February 25, 2021 (MLN): The exports of ICT &Telecom Services have grown by 38% YoY to USD1.119 billion during July-Jan FY21 compared to USD 811 million in the corresponding period last year.

This was informed by Adviser to Prime Minister of Pakistan for Commerce and Investment, Abdul Razak Dawood via his official Twitter account on Thursday.

In the month of January alone, these exports surged by 26% YoY to USD 161 million as compared to USD 128 million in the same month a year ago.

“These exports now constitute a third of our total export of services, and therefore, are of strategic importance to us,” he said. He further anticipated that these exports would cross USD 2 billion by the end of this year.

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NEPRA reserves tariff hike decision in FCA for Jan

February 25, 2021: The National Electric Power Regulatory Authority (NEPRA) on Thursday reserved its decision into fuel price adjustments (FCA) for month of January on a petition filed by Central Power Purchase Agency (CPPA-G) on behalf of power distribution companies.

The regulator was told that the CPPA generated around 974 Gwh from furnace oil and 46 Gwh from high speed costing Rs 12 billion in January.

The CPPA has sought an increase of 93 paisa for the said period on account of FCA under monthly fuel adjustment mechanism.

The officials of National Power Control Centre (NPPC) apprised that January remained worse month and major power breakdown was occurred due to shortage of gas. The gas was diverted to the domestic consumers and no gas based power plant was running, they said.

The NEPRA has proposed 89 paisa per unit hike with Rs 6.9 billion implication on the consumers.

The NEPRA observed that running of power plants without merit order cost Rs 3.90 billion to the consumers.

The CPPA told that electricity consumption witnessed increase during this year resulting decrease in the capacity payments.

After hearing the arguments of petitioner and other stakeholders, the authority reserved the judgment. The regulator would announce its decision after reviewing statistics and detailed deliberation.

 As per routine, every month the CPPA on behalf of power distribution companies, submits details of electricity sale and purchase to the regulatory authority, which then holds a public hearing. After this, NEPRA gives its ruling on fuel cost adjustment for each month.

APP

Nestle Pakistan witnesses 21% higher profits in CY20

February 25, 2021 (MLN):  Nestle Pakistan Limited has earned 21% higher profits in CY20 compared to CY19. The net profits of the company during the year recorded at Rs 8.9 billion as opposed to Rs 7.35 billion reported in 2019.

The earnings per share of the company during the year stood at Rs 195.91/sh in 2020 compared to Rs 162.17/sh in the previous year.

During the year, the company’s revenues increased merely by 2.43% YoY and reached Rs 118.78 billion. Dairy and Nutrition products are the main contributors to this growth while the overall portfolio also benefitted from selling price increases taken to off-set  1.7% YoY increase in input costs.

The gross margin of the company remained flat during the year.

With regards to the major expense head, the company’s administrative expenses jumped by 21.2% YoY however, the impact was offset by the decline in distribution expenses and other expenses by 2.73% YoY and 26.68% YoY respectively.

The finance cost of the company also declined by 12% YoY owing to lower interest rates.

The effective tax rate of the company came in at Rs 29% compared to 31% in 2019.

Financial Result for the Year ended December 31st, 2020 ('000 Rupees)

 

2020

2019

% Change

Revenues from contracts with customers

                  118,781,274

                  115,962,473

2.43%

Cost of goods sold

                  (84,016,549)

                  (82,613,501)

1.70%

Gross Profits

                     34,764,725

                     33,348,972

4.25%

Distribution and selling expenses

                  (14,256,719)

                  (14,656,501)

-2.73%

Administration expenses

                     (4,447,506)

                     (3,667,718)

21.26%

Operating profits

                     16,060,500

                     15,024,753

6.89%

Finance cost

                     (2,805,015)

                     (3,187,695)

-12.00%

Other expenses

                     (1,019,221)

                     (1,390,138)

-26.68%

Other income

                           354,830

                           268,790

32.01%

Profit before taxation

                     12,591,094

                     10,715,710

17.50%

Taxation

                     (3,706,499)

                     (3,361,243)

10.27%

Profit after taxation

                       8,884,595

                       7,354,467

20.81%

Earnings per share - Basic and Diluted (Rupees)

                             195.91

                             162.17

20.81%

 

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