Karachi: Dewan Farooque Spinning Mills Limited has released its unaudited condensed interim financial statements for the first quarter ending September 30, 2026, highlighting the ongoing financial challenges faced by the company amid a turbulent economic environment. The report, dated October 29, 2026, reveals a gross loss of Rs. 58.121 million, a slight improvement from the Rs. 64.304 million loss recorded in the corresponding period of the previous year.
According to information available from the Pakistan Stock Exchange (PSX), the textile sector in Pakistan is grappling with several structural and operational challenges. During the first quarter of FY2027, Pakistan's textile exports experienced a 5.27% increase quarter-on-quarter, reaching USD 5.026 billion. Despite this growth, the sector continues to face significant hurdles, including uncompetitive energy tariffs, high borrowing costs, and escalating raw material prices attributed to a surge in cotton prices. These factors are exacerbated by the lack of a long-term Textile Policy, leading to ad-hoc decision-making.
The company's operating expenses have risen to Rs. 10.294 million, compared to Rs. 8.071 million in the previous year, as it continues to navigate working capital constraints. To maintain operations, the company has resorted to producing yarn on a contract basis.
Dewan Farooque Spinning Mills Limited is actively negotiating with its lenders for a markup-free restructuring of its financial obligations, which is currently in an advanced stage. The management remains confident in securing a favorable outcome and anticipates a waiver for the outstanding markup of Rs. 208.531 million, payable only in the event of a default on the compromise agreement.
Additionally, the company's sponsors have committed to providing financial support as needed to address working capital requirements. These efforts are part of a broader strategy to enhance operational efficiency, optimize resource utilization, and improve productivity as the company prepares for a potential turnaround.