Karachi: The Board of Directors of OLP Financial Services Pakistan Limited (OLP) presented its unaudited condensed interim financial results for the nine months ending March 31, 2025, highlighting a nuanced performance against the backdrop of Pakistan's recovering economy.
Pakistan's economy exhibited signs of resilience during the period, with inflation easing significantly. Inflation rates dropped to 0.7% year-on-year in March 2025 from 20.7% in March 2024. This reduction allowed the State Bank of Pakistan to lower the policy rate by 1,000 basis points from 22% to 12%. Fiscal adjustments led to a primary surplus and a fiscal deficit contraction to 1.7% of GDP for the period from July to January FY2025, compared to 2.6% in the same period the previous year. The current account also shifted from a deficit to a surplus of USD 1.86 billion during July-March FY2025, enhancing the country's external position.
During this period of macroeconomic adjustments, OLP reported a 9% reduction in profit before income taxes and levy (PBT), amounting to Rs. 1,626 million, down from Rs. 1,784 million in the same period last year. This decline was in line with a corresponding 9% decrease in revenue, which fell to Rs. 5,399 million from Rs. 5,961 million. Profit after tax (PAT) also saw a decrease of 7%, standing at Rs. 1,007 million compared to Rs. 1,081 million in the corresponding period of 2024.
According to information available from the Pakistan Stock Exchange (PSX), OLP's total income from operations for the nine months of FY2025 stood at Rs. 4,580 million, marking an 11% decline from the previous year's Rs. 5,127 million. This decrease was largely due to the lower average SBP policy rate of 15.75% and the Karachi Interbank Offer Rate (KIBOR) of 14.84%, both significantly reduced from last year's averages.
Despite these challenges, the company managed to reduce its finance costs by 14% to Rs. 2,494 million, down from Rs. 2,916 million in the same period last year, in line with the decreased average KIBOR. Administrative and general expenses rose slightly by 3% to Rs. 1,235 million, but overall remained controlled.
OLP experienced a reversal in provision for lease and loan losses amounting to Rs. 99 million, compared to a provision of Rs. 10 million last year, due to recoveries from long outstanding and litigation accounts. However, an impairment charge of Rs. 87 million was recorded on its investment in OPP (Pvt.) Limited.
The Board announced an interim cash dividend of Rs. 2 per share for the fiscal year ending June 30, 2025, reflecting a 20% yield for shareholders.
Looking ahead, OLP remains focused on portfolio growth, asset quality maintenance, and risk management amid the evolving economic landscape. The company's consolidated financial statements include results from its subsidiaries, OLP Services Pakistan (Private) Limited and OLP Modaraba, for the same reporting period.