Karachi: Gul Ahmed Textile Mills Limited presented its performance review and unaudited financial statements for the period ending March 31, 2025. The company reported growth in export and domestic sales despite facing increased operational costs, as detailed in the Directors' Report.
The global economy experienced modest and uneven growth in the third quarter of FY25. Inflation rates eased, with headline inflation averaging 3.8%, a decrease from 5.9% the previous year. However, the global economic environment was marked by persistent geopolitical risks and rising trade barriers. The Organization for Economic Cooperation and Development (OECD) anticipates a slight slowdown in global GDP growth from 3.2% in 2024 to 3.1% in 2025. Recent U.S. tariffs on advanced manufacturing and imports from China, along with China's retaliatory measures, have heightened input costs and disrupted global trade. This led to a 14% decrease in crude oil prices and volatility in stock and commodity markets.
Amid these global challenges, Pakistan's economic landscape showed signs of resilience. The country recorded a decade-low inflation rate of 0.7% in March 2025, assisted by stable commodity prices and exchange rates. This allowed the State Bank of Pakistan to lower the policy rate to 12%. Remittances reached a record $4.1 billion in March, prompting a revision of the annual forecast to $38 billion. Despite these positive indicators, Pakistan faces external financing pressures due to significant debt maturities and a 29% U.S. tariff on Pakistani exports. The trade deficit for the first nine months of FY25 stood at $17.98 billion, compared to $17.13 billion in the same period last year. Exports increased by 7.8% to $24.72 billion, while imports rose by 6.6% to $42.70 billion.
In the textile sector, export sales for the first nine months of FY25 reached $13.61 billion, marking a 9.4% increase from $12.44 billion in the same period last year. Export sales grew 9% year-over-year in USD terms, with an 8% increase in Pakistani Rupee (PKR) terms. Domestic and indirect export sales showed a significant growth of 26%. Total PKR sales rose by 13% over the same period last year, reflecting effective strategic initiatives. However, profit margins declined due to cost pressures.
The cost of sales for Gul Ahmed Textile Mills increased by 14%, driven primarily by higher raw material prices, energy tariffs, and wage adjustments. Fuel and power costs rose by 23%, from Rs. 8.4 billion to Rs. 10.3 billion, largely due to gas price hikes. To manage energy costs, the company has operationalized a 2 MW solar plant and plans to commission a 17.2 MW system by the first quarter of FY26. Additional expansions of 10-15 MW are also planned, with biomass and other renewables being explored to diversify energy sources and control long-term costs.
According to information available from the Pakistan Stock Exchange (PSX), Gul Ahmed Textile Mills continues to maneuver through a challenging economic environment. The global GDP growth is expected to slow to 3.0% in FY2026, with inflation forecasted at 3.2%. Ongoing geopolitical tensions and new tariffs may dampen global output and raise inflation risks, underscoring the need for coordinated policy responses.
Domestically, the easing of inflation and lower rates are expected to support economic recovery, particularly in agriculture and retail sectors. Electricity tariffs have been reduced for both residential and industrial users, although RLNG prices increased by 4.08% in April 2025. Pakistan is actively seeking external financing, including a $300 million commitment from the International Finance Corporation (IFC) for the Reko Diq project and a $2.3 billion loan agreement with the International Monetary Fund (IMF), which are aimed at supporting macroeconomic stability and reforms.