Karachi: Bannu Woollen Mills Limited has released its un-audited condensed interim financial statements for the third quarter and nine-month period ending March 31, 2025, revealing a complex financial landscape characterized by rising sales and costs, leading to a significant reduction in profitability.
During the third quarter of the fiscal year, Bannu Woollen Mills reported net sales of Rs. 95.713 million, marking a 45% increase compared to the same period last year. Despite this growth, the company faced a gross loss of Rs. 24.066 million, a sharp contrast to the Rs. 11.785 million gross profit recorded in the corresponding quarter of the previous year. Distribution and administrative expenses also saw an upward trend, amounting to Rs. 10.881 million and Rs. 35.006 million, respectively. The company recorded a loss before tax of Rs. 71.897 million, a significant increase from the Rs. 43.197 million loss reported in the same period last year. The loss per share stood at Rs. (6.68), compared to Rs. (3.89) in the previous year.
Over the nine-month period, the company's net turnover increased by Rs. 106.480 million, a 13% rise from the corresponding period last year. This growth reflects a recovery in demand, bolstered by enhanced sales strategies and easing market constraints. However, the company's net profit after taxation was Rs. 86.942 million, a stark decline from the Rs. 309.408 million earned in the previous year. The prior year's results were significantly boosted by a non-recurring impairment loss reversal from an associated company. Excluding this adjustment, Bannu Woollen Mills' underlying profit performance for 2025 indicates operational resilience.
According to information available from the Pakistan Stock Exchange (PSX), the company's earnings per share (EPS) for the nine-month period stood at Rs. 9.15, down from Rs. 32.55 in the preceding year. This decline is primarily attributed to the absence of the impairment-related reversal recorded in 2024. Despite these challenges, the company's finance cost decreased to Rs. 56.733 million from Rs. 68.927 million, reflecting a reduction in policy rates and improved cash flow management. Greasy production reached 600,098 meters of fabric, down from 818,709 meters in the corresponding period last year, due to a reduction in production shifts.
The future outlook remains uncertain as Pakistan's economy continues to face pressure despite signs of short-term stability. Growth projections by the International Monetary Fund (IMF) and the Asian Development Bank (ADB) for FY2025 stand at 3.2% and 3.0%, respectively, but are subject to significant risks. Inflation estimates range from 3-4% by the Ministry of Finance to 9.5% by the IMF, with potential variations due to economic volatility. The government relies on external financial support, including the IMF's $7 billion program and a $20 billion World Bank package over ten years, although these benefits hinge on long-term reform implementation.
Despite external financing risks, including over $22 billion in external debt repayments due in 2025, Bannu Woollen Mills remains committed to proactive measures to ensure continued success. The company's strategic focus includes reducing operational costs and boosting sales volume to navigate challenges and leverage emerging opportunities in the evolving economic landscape.