Karachi: Al-Ghazi Tractors Limited has reported a substantial downturn in its half-year financial results for the period ending June 30, 2025. This downturn is attributed mainly to the subdued demand in the tractor industry, as the economic environment continues to exert pressure on the company’s core customer base.
The company’s operating revenue fell sharply to Rs. 7,726 million from Rs. 17,540 million in the same period last year. The cost of sales for the half-year amounted to Rs. 6,374 million, a decrease from Rs. 13,600 million in the corresponding period of 2024. Gross profit consequently declined to Rs. 1,351 million from Rs. 3,939 million in the previous year. The financial pressure is compounded by increased distribution and administrative expenses, which have risen due to higher transportation costs linked to the Punjab Government’s Wheat Tractors Scheme and the depreciation cost of the SAP S/4 HANA system.
Al-Ghazi Tractors Limited produced 3,377 tractors and sold 3,322 units during this period, compared to 6,990 and 6,979 units produced and sold, respectively, in the same period last year. The company recorded a net loss after tax of Rs. 75 million, a stark contrast to the profit after tax of Rs. 1,733 million in the previous year, translating to a loss per share of Rs. 1.30 as opposed to earnings per share of Rs. 29.90.
According to information available from the Pakistan Stock Exchange (PSX), the company’s performance is categorized as a very large or significant move, reflecting the challenging market conditions.
The economic environment during the review period saw some stabilization in key macroeconomic indicators, notably with a decline in year-on-year inflation and a reduction in the policy rate to 11%. However, these improvements have not yet translated into an immediate recovery in rural purchasing power. The agriculture sector’s underperformance, specifically a significant contraction in major crops, has further strained farm incomes and liquidity.
Despite these challenges, the company remains cautiously optimistic about a gradual recovery in industry demand, supported by macroeconomic stability and the forthcoming Punjab Government’s Green Tractor Scheme Phase II. The company is also expanding its sales through banking channels and exports as part of its future outlook, though risks from potential seasonal flooding could disrupt agriculture and supply chains.
During this period, the Board appointed Mr. Paul Terence Wagstaff as Director, filling a casual vacancy for the remainder of the Board’s term, in place of Mr. Malik Ehtisham Ikram. The Board expresses appreciation to its stakeholders, including customers, vendors, and suppliers, for their continued support amidst the challenging business environment.