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Karachi: Trust Modaraba has reported a strong financial turnaround in the fiscal year 2023-24, with a profit after tax of Rs. 21.23 million, reversing the marginal loss from the previous year. This significant improvement is attributed to strategic decisions and operational efficiencies in a challenging economic environment.
The Board of Directors of Al-Zamin Modaraba Management, overseeing Trust Modaraba, highlighted in their annual report that the economic pressures and geopolitical tensions, particularly in the Middle East and Eastern Europe, had posed severe risks. Yet, the global economy showed resilience, with Pakistan’s economy experiencing moderate growth due to robust agricultural performance and improved fiscal management. The Russia-Ukraine conflict continued to disrupt supply chains, impacting global markets critically.
During FY 2023-24, Trust Modaraba’s total income surged to Rs. 61.90 million from Rs. 41.17 million in FY 2022-23. The company’s strategic focus on diminishing musharakah and ijarah financing modes paid off with a 50.40% increase in operating income. Management’s proactive measures in risk assessment and fund deployment were key to navigating economic uncertainties effectively.
According to information available from the Pakistan Stock Exchange (PSX), the national bourse itself experienced a historic surge, which favorably impacted Trust Modaraba’s performance, reflecting in an unrealized gain of Rs. 13.71 million on its share portfolio.
Amidst high inflation and challenging economic conditions, Trust Modaraba managed to enhance its gross financing portfolio by 8% to Rs. 355 million. The company also recorded a substantial increase in disbursements, amounting to Rs. 241 million, a 23% rise from the previous year, with a focus on the corporate sector and high-net-worth individuals. This shift in client profiles contributed significantly to the improvement in credit quality, as evidenced by the stable ratings of BBB+/A-2 reaffirmed by VIS Credit Rating Company.
On the governance front, the board underwent changes with the resignation of a founding member, Mr. Sohail Ansar. His vacancy was filled by Mr. Muhammad Sami Ullah, bringing fresh expertise from the banking sector. The board’s effective governance and strategic oversight were crucial in navigating the year’s complexities.
Trust Modaraba also declared a cash dividend of 5%, amounting to Rs. 0.50 per certificate, reflecting confidence in the ongoing stability and profitability of the business.
The Modaraba’s management remains committed to stringent credit risk controls and operational efficiencies to sustain growth in the upcoming fiscal year despite anticipated economic challenges domestically and globally.
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