Arpak International Investments Limited: performance and outlook

Arpak International Investments Limited (PSX: ARPAK) was incorporated in Pakistan as a public listed company in 1977. The principal activity of the company is the investment in the business of all forms including commodities, stocks, fixed income securities, Modarabas, TFCs etc.

Pattern of Shareholding

As of June 30, 2025, ARPAK has a total of 4 million shares outstanding which are held by 610 shareholders.

Directors & their Relatives have the majority stake of 68.14 percent in the company followed by associated companies, undertakings and related parties holding 20.86 percent shares.

Individuals account for 9.17 percent shares of ARPAK. The remaining shares are held by other categories of shareholders.

Historical Performance (2021-2025)

Over the period under consideration, the company’s topline declined in 2021 and 2025. The company posted net profit in 2021 followed by net loss in the subsequent years. The company posted operating profit only in 2024.

The detailed performance review of the period under consideration is given below.

In 2021, ARPAK posted 24.77 percent year-on-year decline in its income which clocked in at Rs.13.06 million. This came on the back of a massive decline in mark-up on loan to an associated company due to monetary easing. Interest on bank deposits also took a dip in 2021 due to discount rate cuts.

Dividend on short-term investment also declined during the year. This was because the company recorded considerable decline in its short-term investments in 2021. ARPAK short-term investments comprised of investment in First Habib Cash Fund units which clocked in at 213,920 units in 2021 versus 309,321 units in the previous year.

While rental income increased during the year, it couldn’t cascade the effect of weaker income from other sources. Operating and general expenses mounted by 12.23 percent in 2021 due to higher payroll expense, travelling & conveyance charges as well as entertainment charges incurred during the year. This translated into operating loss of Rs.6.959 million in 2021, up 1356.17 percent year-on-year.

Share of profit from associated companies - The Premier Sugar Mills and Distillery Company Ltd. (PSM) and Premier Board Mills Limited (PBML) – shrank by 20.71 percent in 2021.

Moreover, ARPAK booked provision worth Rs.132.244 million for impairment on investment in associated companies in 2021. This was against the reversal of Rs.171.572 million recorded in 2020. These factors translated into net loss of Rs.123.99 million in 2021 versus net profit of Rs.190.403 million posted in the previous year.

Loss per share was recorded at Rs.31 in 2021 versus EPS of Rs.47.60 posted in 2020.

In 2022, ARPAK’s income grew by 10.95 percent to clock in at Rs.14.491 million. This was the result of a tremendous increase in mark-up income on the back of monetary tightening. Higher rental income and dividend on short-term investments also buttressed the company’s income during the year.

Operating and general expenses were curtailed by 23.59 percent in 2022 by keeping a check on travelling expense, entertainment expense as well as repair and maintenance charges. This resulted in 88.40 percent decline in operating loss which clocked in at Rs.0.807 million in 2022.

Unlike previous years, where the company recorded share of profit from its associated companies, in 2022, the company posted share of loss worth Rs.7.124 million from its associated companies. Provision booked for impairment on investment in associated companies declined by 47.69 percent in 2022.

By keeping a check on its operating and provisioning expense and on account of superior income, ARPAK was able to record 36.27 percent diminution in its net loss which clocked in at Rs.79.021 million in 2022. This translated into loss per share of Rs.19.76 in 2022.

ARPAK posted 8.90 percent ascend in its income which clocked in at Rs.15.78 million in 2023. Not only did the company’s short-term and long-term investment portfolio substantially increased during the year, the effect of monetary tightening also came into play, pushing the company’s income up.

The only downbeat factor which diluted the topline growth was lower rental income recorded in 2023.

Operating and general expense surged by 13.16 percent in 2023 mainly on account of higher payroll expense, rent, rate and taxes as well as repair & maintenance charges incurred during the year. This resulted in 89.65 percent greater operating loss to the tune of Rs.1.53 million in 2023.

Unlike previous year, ARPAK recorded share of profit from its associated companies to the tune of Rs.18.423 million in 2023.

However, it was gobbled up by 32.55 percent higher provision booked for impairment on investment in associated companies. Net loss ticked down by 3.44 percent to clock in at Rs.76.305 million in 2023. This translated into loss per share of Rs.19.08 in 2023.

In 2024, ARPAK registered the highest topline growth of 38.56 percent which resulted in income of Rs.21.866 million. This was mainly on account of higher rental income and dividend income recognized during the year.

Profit on bank accounts also increased during the year due to monetary tightening, however, markup on loan to associated companies dipped in 2024 due to lesser outstanding loan.

During the year, the company planned to expand its investment portfolio by investing Rs.50 million in Premier Grain Ethanol Limited against which Rs.32 million were already paid.

Operating expense was squeezed by 13 percent in 2024 by controlling payroll expense. For the first time over the period under review, ARPAK recorded operating profit of Rs,6.806 million in 2024 with OP margin of 31.13 percent. Share of profit from associated companies ticked up by 7.46 percent in 2024.

ARPAK booked 198.12 percent higher provision of impairment on investment in associated companies, This resulted in 277 percent higher net loss to the tune of Rs.249.56 million in 2024. Loss per share was recorded at Rs.62.39 in 2024.

In 2025, ARPAK’s income plunged by 46.12 percent to clock in at Rs.11.78 million. This was due to lower rental income and absence of dividend income because the company transferred funds from mutual funds to other equity investment projects which deemed more profitable.

Operating expense was kept in check as evident by only 1.61 percent uptick recorded in 2025. Lower income resulted in operating loss of Rs.3.52 million in 2025. Massive share of loss worth Rs.333.124 million from associated companies could’ve wreaked more havoc on the company’s financial performance during the year; however, it was greatly offset by reversal of provision worth Rs.211.769 million made for impairment of investment in associated company.

ARPAK posted net loss of Rs.125.254 million in 2025, down 49.81 percent year-on-year. This culminated into loss per share of Rs.31.31 in 2025.

Recent Performance (1QFY26)

ARPAK didn’t kick-start FY26 on a robust note. This is evident by 13.58 percent deterioration in its income which clocked in at Rs.2.801 million in 1QFY26. One of the factors was monetary easing which squeezed the company’s mark-up income during 1QFY26.

Besides, lower rental income and lack of dividend income due to transfer of funds from mutual funds to other investment projects also played their role in squeezing the company’s topline during the period under review. To add to ado, operating expense, which was kept in check for the past two years, surged by 22.39 percent in 1QFY26. This resulted in operating loss of Rs.1.09 million in 1QFY26 versus operating profit of Rs.0.061 million recorded in 1QFY25. Share of loss from associated company nosedived by 86.49 percent in 1QFY26.

ARPAK booked provision worth Rs.59.527 million for impairment of investment in associated company in 1QFY26. This was against the reversal of Rs.148.145 million recorded in 1QFY25. This pushed ARPAK’s net loss up by 72 percent to clock in at Rs.87.936 million in 1QFY26. Loss per share was recorded at Rs21.98 in 1QFY26 versus loss per share of Rs.12.78 posted in 1QFY25.

Future Outlook

Share of loss from associated companies and provisioning done for impairment of investment in associated companies are the major causes escalating the ARPAK’s net losses. The company should re-assess its investment strategy and diversify its revenue streams to solidify its financial performance and ensure long-term growth.

Going forward, the company plans to invest in low-risk sectors such as rental income by purchasing lucrative properties. ARPAK also plans to continuously identify profitable opportunities across the sectors and grab them instantly to enhance its shareholder value.