Karachi: Mehran Sugar Mills Limited has released its Quarterly Report for June 2026, revealing a significant decline in profitability over the period. The report, dated July 30, 2026, highlights the challenges faced by the company in an oversupplied domestic market.
According to the report, the turnover for the period ending June 30, 2026, was Rs. 11.47 billion, a decrease from Rs. 13.04 billion recorded in June 2025. The gross profit margin also witnessed a decline, from 14% to 13%. The finance cost saw a reduction to Rs. 272.48 million from Rs. 387.00 million, indicating improved management of financial expenses. However, the profit before tax fell sharply to Rs. 801.85 million from Rs. 1.65 billion, resulting in a decreased profit margin of 9% compared to the previous 15%.
The net profit after tax stood at Rs. 516.49 million, a substantial drop from Rs. 1.25 billion in the corresponding period last year. Earnings per share also declined to Rs. 6.89 from Rs. 16.68.
The directors' report highlighted that the third quarter is typically quieter for sugar companies due to the conclusion of the crushing season. The company emphasized that balance sheet strength is crucial during this period. Pakistan continues to experience a substantial sugar surplus following a large crop, which has led to elevated inventories and subdued trading activity. The report noted that the timing of export approvals will be a critical factor in stabilizing the market.
According to information available from the Pakistan Stock Exchange (PSX), the company's financial position reflects the broader challenges faced by the sugar industry. The directors expressed that while lower prices have affected short-term profitability, the cyclical nature of commodity businesses necessitates a focus on financial preparedness.
The company's financial statement as of June 30, 2026, shows total assets amounting to Rs. 10.15 billion, up from Rs. 7.41 billion as of September 30, 2025. Non-current assets increased to Rs. 4.47 billion from Rs. 3.69 billion, while current assets rose to Rs. 5.68 billion from Rs. 3.72 billion. The equity and liabilities section indicates a rise in non-current liabilities to Rs. 1.53 billion from Rs. 1.02 billion, with current liabilities increasing significantly to Rs. 3.69 billion from Rs. 1.62 billion.
Looking ahead, the report anticipates that the level of carryover inventory and the timing of export approvals will significantly impact pricing dynamics. Industry estimates suggest a larger upcoming sugarcane crop, which could necessitate timely export policies to manage potential excess supply.
The directors emphasized the company's commitment to operational discipline, financial strength, and prudent capital allocation. Despite the challenging environment, the company continues to invest in cane development, strengthen relationships with growers, and improve operational efficiency. These measures are aimed at ensuring long-term business sustainability and value for shareholders.