Karachi: Philip Morris Pakistan Limited has announced a loss after tax of PKR 580 million for the quarter ending March 31, 2025, a stark contrast to a profit of PKR 438 million reported in the same period last year. The company's financial results come amid a backdrop of mixed economic signals and challenges within the tobacco industry.

Despite a total net turnover of PKR 8,631 million during the first quarter of 2025, which included a 40% increase in domestic net turnover to PKR 5,326 million, the company faced headwinds. This domestic growth was attributed to the stabilization of cigarette volumes and increased pricing, along with a growing market for nicotine pouches, which now account for 3% of domestic net turnover. The export turnover contributed an additional PKR 3,305 million.

The broader economic context in Pakistan includes lower interest and inflation rates, a managed current account deficit, and stable exchange rates. However, the International Monetary Fund's continued monitoring under the Extended Fund Facility highlights the fragile economic recovery. Recent geopolitical tensions and tariff applications have further impacted investor confidence, resulting in a visible decline in Pakistan Stock Exchange indices. According to information available from the Pakistan Stock Exchange (PSX), these factors have weighed heavily on market performance.

Within the tobacco sector, the prevalence of low-priced, non-tax paid cigarettes remains a significant concern, reportedly holding over 50% of the market share. This issue results in an estimated annual revenue loss of PKR 300 billion for the National Exchequer, prompting calls for effective enforcement of the Track & Trace system to curb this illicit trade.

Philip Morris Pakistan Limited's contribution to the National Exchequer for the quarter reached PKR 12,685 million, an 18% increase compared to the prior year. For the current fiscal year, from July 2024 to March 2025, the company's contributions amounted to PKR 37,124 million, marking an 8% increase from the same period in the previous fiscal year.

The company's management is focused on improving financial performance by leveraging global resources and enhancing product quality, processes, and operational efficiencies. Philip Morris Pakistan Limited remains committed to adhering to government policies aimed at addressing the challenges posed by non-tax paid cigarettes, while also working to bolster its financial standing in the face of ongoing industry and economic challenges.