Karachi: Pak Aluminium Beverage Cans Ltd (PABC) is poised to report a significant 32% quarter-over-quarter increase in its earnings for the second quarter of 2024, anticipated to reach Rs3.31 per share. This surge is attributed to robust domestic sales during the peak summer season and an uptick in exports primarily to Afghanistan and Central Asian nations.
According to JS Global, the expected growth reflects a combination of heightened domestic demand and strategic export expansions. However, despite the quarterly growth, the year-over-year earnings are projected to decline by 13%, primarily due to a slight dip in overall revenue. The firm’s financial performance also highlights a notable rebound from previous quarters, with gross profits and pre-tax earnings seeing substantial sequential increases of 33% and 32%, respectively.
The second quarter also marks a significant milestone with PABC set to declare an interim dividend of Rs3 per share. This move comes after a hiatus in final dividend announcements in the previous year due to increased capital requirements. The upcoming dividend distribution is supported by the company’s solid cash reserves and short-term investments, totaling Rs8 billion.
In addition to its financial recovery, PABC has maintained its operational momentum despite recent logistical challenges at the Torkhum border affecting Pak-Afghan trade. The company has navigated these disruptions effectively, ensuring continued delivery of export consignments. Furthermore, potential risks from ongoing political disturbances in Bangladesh are expected to have limited impact on the company’s performance, given the established long-term supply agreements with major beverage brands.
On the commodities front, Aluminium prices have seen significant volatility, peaking in April at US$2,721 per ton before stabilizing in subsequent months. This price fluctuation is supported by strong import demand from China and recent regulatory changes in metal trading. Looking forward, PABC remains well-positioned to manage input cost variations without affecting its profit margins due to its cost-plus pricing strategy.