Karachi: Pak Elektron Limited (PAEL) has revealed a mixed financial performance for the first half of 2024, with notable declines in sales volumes tempered by gains in profitability margins, as shared in today’s analyst briefing.

According to AKD Securities Limited, PAEL experienced a significant drop in its annual revenue from PKR 66 billion in 2023 to PKR 54 billion, primarily due to a 50% decrease in sales volumes linked to letter of credit limitations. Despite this, the company’s bottom line grew by 7.7% year-over-year, bolstered by a 46% price increase implemented last year, enhancing gross margins to 25.2% in 2023 from 19.6% in 2022.

For the first half of 2024, PAEL posted a topline of PKR 30.1 billion with further improved gross margins of 26.8%. The Power division reported a rise in gross margins to 23.8% in 2023 from 19.1% in 2022, and the Appliances division also saw an increase to 26.82% in 2023 from 19.9% in 2022, despite a 26.0% drop in revenue.

The management outlined strategic goals for maintaining market shares in various appliance categories and emphasized not engaging in price wars but rather focusing on margin preservation. They also highlighted significant growth opportunities in washing machines and LED segments, where the company currently holds relatively low market shares.

Additionally, PAEL’s management is looking to expand its presence in international markets, including the US, UK, and South America, with a specific focus on increasing exports. The company noted that margins in North American markets are notably higher than those in the local, Middle Eastern, and African markets.

PAEL operates both its appliance and power divisions at 50-60% annual capacity utilization. The company expects to obtain UL certification by the end of the year, which will complement its existing certifications for Europe and the Middle East.