KARACHI: Philip Morris (Pakistan) Limited on Tuesday announced a 39 per cent decline in its profit after tax for the quarter ended September 30, 2021.
According to financial results shared with the Pakistan Stock Exchange (PSX), the company declared a profit of Rs351 million for the quarter ended September 30, 2021 as compared with the profit of Rs575.56 million in the same quarter of the last year.
The board of directors of Philip Morris (Pakistan) Limited at its meeting held on October 26, 2021 approved the quarterly financial statements of the company for the quarter ended September 30, 2021.
The company declared a net profit of Rs2.07 billion for the nine months period ended September 30, 2021 as compared with Rs1.83 billion in the same period of the last year.
During the nine months ended September 30, 2021, the company’s net turnover stood at Rs12,789 million reflecting an increase of 7.5 per cent versus the same period last year.
During the period, the Company’s contribution to the National Exchequer, in the form of excise duty, sales tax and other government levies, stood at Rs20,449 million (higher by 17.4 per cent compared to the same period last year) reflecting 60.9 per cent of nine months gross turnover.
Unaltered excise rate on cigarettes in June 2021 during Federal Budget 2021/2022 is supporting Government Revenues and added to FBRs record revenue collection.
During the first Quarter ended September 30, 2021 of the ongoing fiscal year 2021/22, the Company’s contribution to the National Exchequer (July’21-Sep’21) in the form of excise duty, sales tax and other Government levies, stood at Rs6,014 million (higher by 22.1 per cent versus prior period).
No change in excise rates also led to consumer price stability of the tax paying cigarette brands, however, the price gap between tax paid and non-tax paid brands remains very significant and non-tax paid brands continue to sell lower than the minimum price for the purposes of levy and collection of federal excise duty of i.e. Rs63 per pack.
We are of the view that Pakistan’s economy which started to gain momentum in the first half of the calendar year, is now facing serious challenges.
The continuing rise of commodity and fuel prices internationally accompanied by a devaluation of the PKR v/s US$ has pushed up the inflation rate.
The country’s economic challenges, therefore, need greater focus by the Government as it has already eroded the purchasing power of the common man.
The management is concerned that the current volatile domestic and international economic environment might have serious consequences for the Company’s operations especially, as it may divert the cigarette consumer to cheaper illicit brands to offset the decline in their income.