January 31, 2025 – Pakistan Cables Limited (PCAL) has announced a significant loss of Rs 186.65 million for the first half of the fiscal year 2024-25 (1HFY25), a stark contrast to the profit of Rs 217.97 million reported during the same period last year. The company’s financial results reflect a range of challenges, including increased costs, higher finance charges, and a decline in gross profit despite a rise in revenues.
The loss per share for the period stood at Rs 3.43, down from earnings per share (EPS) of Rs 4 in the previous year, signaling a difficult period for the company. While the firm experienced a positive trend in its top-line performance, it faced rising expenses that weighed heavily on profitability.
Revenue from contracts with customers saw a notable increase of 21.91%, reaching Rs 15.71 billion compared to Rs 12.89 billion in the first half of FY24. This growth was primarily driven by the company’s expanding customer base and enhanced product offerings. However, despite this uptick in revenue, the rising costs of production proved to be a major hurdle. The cost of sales increased by 26.68%, reaching Rs 14.06 billion, which contributed to a decline in gross profit by 7.63%, dropping to Rs 1.65 billion from Rs 1.79 billion during the same period in the previous year.
Operating expenses also rose during the period. Marketing, selling, and distribution expenses climbed 11.41% to Rs 555.41 million, while administrative expenses saw a 10.93% increase, totaling Rs 187.61 million. These higher costs were exacerbated by the company’s finance costs, which surged by 52.62% to Rs 1.25 billion, mainly due to the increased borrowing costs. Finance costs have become a significant burden for the company, affecting its overall profitability.
Despite these challenges, PCAL was able to mitigate some of the financial pressure through a reversal of impairment on trade debts, which amounted to Rs 13.51 million. This reversal provided some relief when compared to a loss of Rs 16.51 million in the same period last year. In addition, the company managed to reduce other expenses by 71.78%, which totaled Rs 11.74 million. Other income also saw a substantial increase of 189.26%, reaching Rs 135.11 million, which helped offset some of the negative impacts from higher operating and finance costs.
As a result of these various factors, the company reported a pre-tax loss of Rs 224.14 million, compared to a pre-tax profit of Rs 276.91 million in the same period last year. After accounting for levies and income tax credits, PCAL posted a loss after tax of Rs 186.66 million, a significant decline from the profit of Rs 217.97 million recorded in 1HFY24.
Looking ahead, the company’s financial performance for the remainder of FY25 will likely depend on its ability to control costs, improve operational efficiencies, and manage its finance expenses more effectively. While revenue growth remains a positive sign, the higher cost structure and financing burdens will continue to pose challenges for Pakistan Cables.
These results highlight the importance of managing rising costs, particularly in the face of increasing borrowing expenses, while also focusing on strategies that can help the company strengthen its bottom line in the coming quarters. As PCAL continues to navigate these challenges, it will be crucial for the company to focus on enhancing its operational efficiency and securing favorable financial conditions moving forward.
In the meantime, stakeholders will be closely monitoring the company’s next steps in addressing these issues to turn its financial performance around for the remainder of the fiscal year.