Business Recorder
Abbott is a multinational healthcare company engaged in providing efficient and life-changing medical technologies and services across the globe. Abbott Laboratories Pakistan Limited (PSX: ABOT) was setup as a public listed company in Pakistan in 1948. The company manufactures, imports and markets pharmaceutical, diagnostic, nutritional, diabetic care hospital and consumer products. Pattern of Shareholding As of December 31, 2025, ABOT has a total of 97.900 million shares outstanding which are held by 3988 shareholders. Associated Companies, Undertakings and Related parties form the largest shareholder category of ABOT with 78.85 percent shares. Under this category, M/S Abbott Asia Investments Limited dominates with 76.26 million shares. Local General Public grabs the next spot with an ownership of 8.17 percent of ABOT’s shares followed by Modarbas & Mutual Funds with a stake of 4.23 percent in ABOT. Banks, DFIs and NBFIs hold 3.11 percent of the company’s shares while insurance companies hold 1.096 percent shares. The rest is held by other categories of shareholders. Historical Performance (2019-25) ABOT’s topline followed an upward trajectory over the period under consideration. Conversely, its bottomline registered decline in 2019, 2022 and 2023. The company’s margins which considerably eroded in 2019 bounced back in 2020 and 2021. In the subsequent two years, ABOT’s margins witnessed a substantial plunge with margins hitting their lowest level in 2023. This was followed by a sound recovery in margins in 2024 and 2025. The detailed performance review of the period under consideration is given below. In 2019, ABOT’s net sales grew by a meager 1.47 percent year-on-year to clock in at Rs.30,155.88 million. Pharmaceutical sales which constituted the major chunk of ABOT’s sales mix dropped by 3.5 percent in 2019 on account of unfavorable economic and regulatory environment. Conversely, nutritional sales grew by 16 percent while General Health Care (GHC), diagnostics and Diabetic care cumulatively grew by 10.4 percent during the year. 13 percent year-on-year decline in gross profit was the effect of Pak Rupee depreciation and high inflation. This also culminated into GP margin of 28.28 percent in 2019 versus GP margin of 32.98 percent registered in the yesteryear. Selling & distribution expense surged by 12.39 percent in 2019 owing to greater advertising &promotional activities, higher payroll expense as well as elevated travelling charges. Administrative expense also escalated by 19.76 percent in 2019 on the back of higher payroll expense as ABOT expanded its workforce from 1465 employees in 2018 to 1540 employees in 2019. Higher computer expense also contributed in driving up the administrative expense in 2019. Other expense showed some respite mainly due to better management of exchange loss and lower profit related provisioning done in 2019. Other income also dropped by 23.25 percent in 2019 due to decline in income from savings and deposit accounts and lesser scrap sales. Operating profit dwindled by 41.19 percent in 2019 with OP margin sliding down from 14.67 percent in 2018 to 8.5 percent in 2019. Finance cost also hit the bottomline hard as it enlarged by 240.19 percent in 2019 due to increase in discount rate during the year coupled with a sizeable increase in lease liabilities. The bottomline shrank by 51.75 percent year-on-year in 2019 to clock in at Rs.1,299.89 million with EPS of Rs.13.28 versus EPS of Rs.27.52 posted in 2018. NP margin also slipped from 9.07 percent in 2018 to 4.31 percent in 2019. While other sectors of the economy would have definitely given a moan of despair in 2020 when the global pandemic hit the economies, it was the other way round for the Pharmaceutical sector. The phenomenal performance portrayed by ABOT speaks volumes of the merry times it enjoyed in 2020. The margins of the company that had been shrinking since 2018 rebounded in 2020. In 2020, the company bagged a hefty topline growth of 17 percent year-on-year with net sales clocking in at Rs.35,283.38 million. The growth was mainly supported by the nutritional segment of the company which majorly comprised of adult nutritional supplements which attained a massive 37.5 percent year-on-year growth. Sustained performance of ABOT’s established brands drove up pharmaceutical sales by 12.6 percent in 2020. Diagnostic sales inched up by 4.1 percent whereas GHC and diabetic care cumulatively rose by 5.6 percent in 2020. While export sales couldn’t gain momentum during the year might be due to supply chain bottlenecks amidst lockdown and restrictions on the movement of people and goods, local sales attained massive growth during the year. Gross profit heightened by 38.91 percent in 2020 resulting in GP margin flying up to 33.57 percent in 2020 mainly on the back of improved prices as well as elevated sales volumes in nutritional segment followed by pharmaceutical segment. Selling & Distribution expense took a nosedive of 2.48 percent in 2020 owing to less travel cost and promotional activities on account of COVID-19. Administrative expense slumped by 12.23 percent in 2020 on account of significantly less computer expense. Other expense increased by 35.50 percent in 2020 on the heels of increased provisioning for WWF, WPPF and CRF, but to set this off, other income exponentially grew mainly on account of liabilities pertaining to PC support and other infrastructure related services written back by Abbott B.V. Netherlands. Hence, operating profit grew by 146.52 percent in 2020 with OP margin climbing up to 17.91 percent. It is to be noted that the Finance cost multiplied by 44.86 percent in 2020 despite low discount rate backdrop. While the company is sufficiently liquid, finance cost grew on account of markup on lease liabilities recognized for business and vehicles. The bottomline burgeoned by 248.90 percent in 2020 to clock in at Rs.4,535.25 million with EPS of Rs.46.33 and NP margin of 12.85 percent. ABOT continued to follow the growth trajectory in 2021 whereby its topline boasted a year-on-year growth of 20.65 percent to clock in at Rs. 42,569.86 million. This was mainly on account of diagnostic sales which multiplied by 75.9 percent due to COVID related testing and increased OPD activities. General Health Care and Diabetic Care segment also shored up the topline by attaining a growth of 60.8 percent. These two segments were followed by nutritional and pharmaceutical sector bagging a year-on-year growth of 17.7 percent and 15.5 percent respectively in 2021. Better products mix and upward price adjustments played their due role in keeping the margins buoyant during 2021. Gross profit mounted by 35.7 percent in 2021. GP margin touched its highest level of 37.76 percent in 2020. Distribution expense which were muted during 2020 mounted by 33.10 percent in 2021 on account of increased promotional drives particularly by Nutritional segment and increased travel charges as COVID related restrictions began to ease off. Higher warehousing and freight charges on account of increased volume also contributed towards higher distribution expense in 2021. Administrative expense surged by 12.43 percent in 2021 on account of higher depreciation charge and elevated payroll expense as number of employees rose up to 1469 in 2021. Pak Rupee Depreciation and ABOT’s dependence on imported raw materials and finished goods pushed up its exchange loss which along with increased provisioning for WWF, WPPF and CRF drove other expense up by 43.69 percent in 2021. Other income slid by 3.66 percent in 2021 due to high-base effect as the company wrote-back of liabilities in the previous year. All these factors translated into 34.47 percent bigger operating profit in 2021 with OP margin clocking in at 19.96 percent. Finance cost ticked up by 14.9 percent despite monetary easing. This was on account of unwinding of GIDC. Net profit grew by 31.57 percent in 2021 to clock in at Rs.5967.06 million with EPS of Rs. 60.95 and NP margin of 14.02 percent. ABOT’s net sales grew by 15.71 percent in 2022 to clock in at Rs.49,257.72 million.. Nutritional segment registered the highest year-on-year sales growth of 23.1 percent in 2022 followed by pharmaceutical 14.2 percent, diagnostic 9.4 percent and GHC and diabetic care 8.9 percent. High commodity prices, Pak Rupee depreciation, elevating energy tariff, exorbitant fuel prices as well soaring inflation took its toll on the gross profit of ABOT which dwindled by 9.64 percent in 2022. GP margin leveled down to 29.49 percent in 2022, falling from its peak of 37.76 percent in 2021. Distribution expense grew by a paltry 7.14 percent in 2022 on account of higher payroll expense, travelling expense as well as promotional drives by the nutritional segment. Increased salaries to comply with the minimum wage rate, coupled with hike in utility expense and depreciation drove up administrative expense by 22.7 percent in 2022. Other income magnified by 44.39 percent in 2022 due to high interest income, income from Abott GmbH as well as scrap sales. However, the growth in other income was counterbalanced by 43.9 percent higher other expense registered in 2022 due to exorbitant net exchange loss. As a result, operating profit contracted by 27.11 percent in 2022 with OP margin dropping to 12.58 percent. Despite the onset of monetary tightening, finance cost contracted by 46.36 percent in 2022 on account of lesser amount incurred under unwinding of GIDC as well as lower lease liabilities. Net profit fell by 49.65 percent in 2022 to clock in at Rs.3004.19 million with EPS of Rs.30.69 and NP margin of 6.10 percent. ABOT posted 12.62 percent higher sales to the tune of Rs. 55,475.27 million in 2023. During the period under consideration, pharmaceutical segment sales posted 20 percent rise due to superior performance of ABOT’s established brands. This was followed by 18.1 percent growth posted by General Health Care and Diabetic care segment. 15.5 percent year-on-year growth was registered by the diagnostic segment in 2023 due to price revisions done in 3QCY23. Exorbitant rise in raw material prices coupled with Pak Rupee depreciation, high indigenous inflation, heightened energy tariff and increased provision for slow-moving and obsolete stores & spares in compliance with provisioning policy and high inventory levels trimmed down gross profit by 18.65 percent in 2023. GP margin recorded its lowest level of 21.30 percent in 2023. Distribution expense escalated by 14.23 percent in 2023 due to higher salaries of sales force, sales commission and increase in promotional activities undertaken during the year. Administrative expense grew by 17.12 percent in 2023 due to higher payroll expense on account of inflation as well as higher depreciation expense on account of capitalization. 10.15 percent higher other expense incurred n 2023 was due to exchange loss which was partially offset by lower provisioning done for WWF and WPPF. Other income improved by 41.12 percent in 2023 due to write back of liabilities which was partially offset by lower interest income as the company squeezed its bank balances. ABOT recorded 57.71 percent thinner operating profit in 2023 with OP margin sinking to 4.72 percent. Finance cost slid by 36.10 percent in 2023 despite monetary tightening. This was due to lesser outstanding lease liabilities and no unwinding of GIDC recorded in 2023. Net profit eroded by 91.29 percent to clock in at Rs.261.78 million with EPS of Rs.2.67 and NP margin of 0.47 percent. In 2024, ABOT recorded 22.90 percent improvement in its net sales which clocked in at Rs.68,177.20 million. During the year, pharmaceutical segment posted 22.1 percent growth in revenues on the back of higher volumes as well price revision following the deregulation of pricing of non-essential drugs. Diagnostic segment registered 36.9 percent growth on account of increased customer base. 20.8 percent growth was registered by nutritional segment on the back of price adjustments. General and diabetic care revenues grew by 14.4 percent in 2024. Cost of sales surged by 10.95 percent in 2024 due to higher raw material prices as well as heightened energy tariff. However, it was absorbed by price revision and superior volumes registered in 2024. This culminated into 67 percent higher gross profit posted in 2024 with GP margin bouncing to 28.95 percent. Selling & distribution expense surged by 15.70 percent in 2024 due to higher promotional activities as well as increased salaries and sales commission. Administrative expense escalated by 12.68 percent in 2024 due to higher payroll expense in line with inflation as well as elevated utilities expense and travelling charges incurred during the year. 51.57 percent decline in other income in 2024 was due to high-base effect as the company wrote back liabilities in the previous year. Other expense also dropped by 48 percent in 2024 due to lower exchange loss which was partially offset by increased profit related provisioning done during the year. ABOT recoded 249.28 percent bigger operating profit in 2024 with OP margin jumping up to 13.42 percent. Finance cost plunged by 22 percent in 2024 due to considerably lower lease liabilities outstanding during the year. Net profit posted a staggering 1899.50 percent year-on-year growth to clock in at Rs.5,234.23 million with EPS of Rs.53.46 and NP margin of 7.68 percent. In 2025, ABOT’s topline registered 10.59 percent improvement to clock in at Rs.75,397.73 million. This was due to a variety of factors. The revenue from pharmaceutical segment registered 15.6 percent rise on account of price adjustment as well as growth in volumetric sales. Nutritional segment posted 9 percent rise which came as a result of price adjustment while volumes dropped during the year. Diagnostics segment posted 18.2 percent decline in 2025; while price increased during the year, the revenue decline was driven by loss of tenders in ARDX division on account of change in government spending policies. General health care portrayed marginal growth while diabetics care recorded marginal decline in 2025. The deregulation of pricing of non-essential medicines coupled with the company’s constant efforts to increase operational efficiency resulted in 34 percent enhancement in gross profit in 2025. GP margin also climbed up to 35 percent in 2025. Selling & distribution expense surged by 19.17 percent in 2025 on the back of increased salaries of sales force, sales force expansion, higher sales commission, greater promotional activities including sample distribution. Administrative expense escalated by 16.63 percent in 2025 due to higher payroll expense on account of revision of minimum wage rate. Other expense multiplied by 89.37 percent in 2025 due to greater provisioning done for WWF, WPPF, CRF and ECL. Other expense was greatly offset by 60.37 percent stronger other income recorded during the year which was the result of liabilities no longer payable written back during the year, greater income on saving accounts and gain recognized on the disposal of property, plant and equipment in 2025. Operating profit strengthened by 48.34 percent in 2025 with OP margin jumping up to 18 percent. Finance cost posted 220.40 percent spike in 2025 due to increase in lease liabilities. ABOT’s debt-to-equity ratio rose from 0.1 percent in 2024 to 1 percent in 2025. Net profit grew by 52.20 percent to clock in at Rs.7966.50 million in 2025. This translated into EPS of Rs.81.37 and NP margin of 10.57 percent in 2025. Recent Performance (1QCY26) During the first quarter of the ongoing calendar year, ABOT recorded 2 percent uptick in its net sales which clocked in at Rs.17,704.722 million. While volumes dropped during the period under consideration, upward price revision and greater share of non-essential medicines in the sales mix kept the topline afloat. ABOT recorded 14.65 percent greater gross profit in 1QCY26 with GP margin clocking in at 37.83 percent versus GP margin of 33.68 percent recorded in 1QCY25. Selling and administrative expense surged by 7.23 percent and 25.51 percent respectively in 1QCY26 on account of inflationary pressure which pushed up the payroll expense and enhanced marketing & promotional activities undertaken during the period. Other expense remained largely intact during 1QCY26. Conversely, other income deteriorated by 11.78 percent during the period despite 89 percent increase in cash reserves. This was due to monetary easing and lesser proceeds from the sale of fixed assets in 1QCY26. Operating profit strengthened by 20 percent in 1QCY26 with OP margin clocking in at 18.69 percent versus OP margin of 15.89 percent recorded in 1QCY25. Finance cost surged by 359.92 percent to clock in at Rs.18.15 million in 1QCY26. This was due to increase in lease liabilities. However, ABOT has a very low gearing, hence; finance cost is not much of an issue. Net profit grew by 21.29 percent to clock in at Rs.1940.308 million in 1QCY26 with EPS of Rs.19.82 and NP margin of 10.96 percent. This was against the EPS of Rs.16.34 and NP margin of 9.22 percent recorded in 1QCY25. Future Outlook Deregulation of the prices of non-essential medicines allowed the company to pass on the onus of cost hike to its customers and recorded stronger margins and profitability. However, resurfacing inflationary pressures may erode the purchasing power of consumers and result in lower sales volume. Price hike in major APIs due to Middle East conflict may also take a toll on the margins. The company is also making concerted efforts to diversify its product offerings, attain cost optimization and maintain a stronger balance sheet. The introduction of ibuprofen in inject-able form and launch of small SKU sizes of ENSURE and PEDIASURE are the efforts in the right direction to attract the price conscious masses.
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