Karachi, March 27, 2025 – Philip Morris (Pakistan) Limited (PMPK) has reported a significant 32% decline in its annual profit after tax for the financial year ending December 31, 2024.
The drop in profitability highlights the challenges faced by the company amid rising costs and regulatory changes in Pakistan’s tobacco industry.
According to the financial results submitted to the Pakistan Stock Exchange (PSX), Philip Morris (Pakistan), the country’s second-largest cigarette manufacturer, recorded a profit after tax of Rs 255 million for 2024. This marks a sharp decrease from the Rs 380 million reported in the previous year.
Despite a robust increase in revenue, the company’s profitability was severely impacted by higher costs. The turnover of Philip Morris (Pakistan) surged by an impressive 77.39%, reaching Rs 32.32 billion for the year ended December 31, 2024, compared to Rs 18.22 billion in the preceding year. However, the soaring cost of sales offset these gains, eroding the company’s bottom line.
The financial report revealed that the cost of sales skyrocketed to Rs 29.53 billion, reflecting a sharp 146% increase from Rs 12.02 billion in the previous year. This substantial rise in expenses is primarily attributed to higher sales tax and federal excise duty, which escalated following changes in tax rates imposed last year by Pakistan’s regulatory authorities.
Philip Morris (Pakistan) further disclosed that its distribution and marketing expenses also witnessed an upward trend, climbing to Rs 6.87 billion in 2024, up from Rs 5.58 billion in the prior year. Similarly, administrative expenses surged to Rs 2.24 billion, compared to Rs 1.84 billion in 2023, adding further pressure to the company’s overall financial performance.
The mounting costs and stringent taxation policies continue to pose challenges for Philip Morris (Pakistan) and other players in the industry. The company remains focused on strategic cost management and operational efficiencies to mitigate the impact of rising expenses. Going forward, Philip Morris (Pakistan) will need to navigate these economic and regulatory hurdles to stabilize its financial position in the competitive Pakistani market.