Topline Pakistan Research has provided insights from Pakistan Tobacco Company (PAKT)’s Corporate Briefing today: The tobacco industry faces challenges due to affordability issues and a 57% share of the illicit market.

– PAKT announced a dividend of Rs 100 per share and reported a 19% year-on-year increase in net turnover to Rs 69.4 billion. Profit After Tax (PAT) rose 30% to Rs 14.3 billion, bolstered by a 350% increase in export turnover to Rs 10 billion. EPS also increased by 30% to Rs 55.88.

– The gross profit margin improved to 47.3%, driven by cost optimization and higher export margins, with notable performance in Greece and European markets.

– Velo, introduced two years ago, contributes 4-5% of total turnover and is expected to break even this year, with margins expected to improve moving forward.

– Most of the tobacco crop was successfully harvested before recent rains, preserving yield in Khyber Pakhtunkhwa (KPK), while assessments in Punjab are ongoing.

– Cigarette consumption has remained at about 80 billion sticks over the last few years, and management highlights the need to reduce excise duty to combat the illicit market.

– The effective tax rate has increased due to certain disallowed expenses by the government.