Packages Limited (PKGS) - May 2023

Packages Limited (PKGS) – May 2023

Research Team

Table of Contents

Corporate Briefing Notes

Packages Limited (PKGS) held its corporate briefing session yesterday to discuss the financial results for CY22 and its outlook.

Key Highlights

● During CY22, topline of the company recorded at PKR122bn compared to PKR80bn, witnessing a growth of 52% YoY, respectively. The exponential increase is mainly attributed to higher dividend payout from the holding companies and rental income.
● The investment portfolio of the company includes Tri-Pack Films (69.26%), IGI Holdings Ltd (10.51%), and Nestle Pakistan (8.05%). However, other unlisted companies include Bulleh Shah Packaging (100%), Packages Convertors (100%), Anemone holdings (100%), Packages Lanka (79.07%), Packages Real Estate (75.16%), DIC Pakistan (54.98%), and Omya Pack (50%).
● Moreover, the company also acquired Sanofi-Aventus Pakistan Ltd. (41.07%) in April 28, 2023.
● During CY22, the topline of Packages Convertors Pvt. Ltd. grew by 39% YoY to PKR42bn vs PKR30bn in SPLY. Whereas, EBIT stood at PKR 2.6bn during the year. The sales breakup of the company comprises of flexible packaging (46%), Folding Cartons (25%), and other consumer products (29%). The folding cartons segment offers a wide range of products for the tobacco, pharma, FMCGs and food industries. Company also works with international customers include NESTLE, P&G, and Unilever.
● Packages Real Estate, with a 75.16% stake, began leasing office space to corporate clients from Jul’22. They also operate Packages Mall, which has over 200 shops with covering the area of 1.3 million square feet. The revenue witnessed a significant increase of 39% YoY to PKR4.6bn, with improved EBIT to 592mn, respectively.
● Flexible Packages Convertors, holds a 63.5% stake in Anemone Holdings Ltd. The company produce Shrink Film, Bread Bags, Refuse Bags, Sugar Bags, and Milk Films. The revenue plunged by 22% YoY to ZAR 545Mn, compared to ZAR 698mnin SPLY. However, the company also booked an impairment loss of PKR6897mn due to higher carrying value. To address this, the company is undergoing a restructuring process to assess the viability.

Future Outlook

● Going-forward, macro-economic challenges include high interest rates, PKR volatility and supply chain disruptions remain the key challenges for the company. However, the company is focusing more on augmenting the exports and to procure raw materials domestically to hedge the risk of aforementioned challenges.

Important Disclosures


This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.

Analyst certification:

The research analyst for this report certifies that 1.all of the views expressed in this report accurately reflect her personal views about the subject and part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this report.

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