Rawalpindi: D.M. Textile Mills Limited, a former textile and clothing manufacturer, reported a net profit of PKR 14.85 million for the fiscal year ended June 30, 2024, despite its manufacturing operations remaining closed. The profit was primarily attributed to rental income from its real estate assets, contrasting sharply with a net loss of PKR 14.19 million recorded in the previous year.

The company's financial recovery comes despite its prolonged non-operational status since 2014, primarily due to capital constraints that have halted its textile operations. According to information available from the Pakistan Stock Exchange (PSX), D.M. Textile Mills' current liabilities exceeded its current assets by PKR 3.82 million as of June 2024, signaling ongoing financial challenges.

The Rawalpindi-based company's earnings from rental income reflect a strategic shift from its core manufacturing business to leveraging its real estate holdings. This move has provided a temporary financial respite and helped avoid further financial deterioration. Notably, the company's board is considering a significant strategic shift to real estate development in response to the adverse market conditions affecting the textile sector.

However, the company faces significant legal and financial hurdles, including unresolved legal issues concerning property transfers and long-standing liabilities amounting to PKR 114.63 million. These issues continue to pose risks to the company’s financial stability and operational restart.

The auditors, in their report, issued an adverse opinion regarding the company’s financial statements, citing non-compliance with several statutory requirements and concerns about the company’s ongoing viability as a going concern.

As D.M. Textile Mills navigates through these challenges, its management remains focused on resolving legal matters and restructuring the business to align with more profitable ventures, particularly in real estate.