Karachi: Chashma Sugar Mills Limited has demonstrated a significant financial turnaround for the nine-month period ended June 30, 2026, as detailed in the company's directors' review report released on July 30, 2026. The report highlights substantial improvements in net sales and operational efficiency, despite ongoing economic challenges affecting the sugar industry.
The company reported a net profit of Rs. 139.945 million during the period, a remarkable recovery from a net loss of Rs. 1.482 billion in the same period last year. Net sales surged by 62.3% to Rs. 25.05 billion, up from Rs. 15.44 billion in 2025. This growth was driven by increased sales volumes in the Sugar and Ethanol Divisions and contributions from the recently merged Flour Division.
The company's gross profit saw a significant increase, reaching Rs. 4.748 billion, compared to Rs. 1.404 billion in the previous year. The gross profit margin improved to 18.95% from 9.10%, reflecting enhanced production efficiencies and favorable pricing. Consequently, the profit from operations rose to Rs. 2.73 billion, up from Rs. 253 million.
According to information available from the Pakistan Stock Exchange (PSX), Chashma Sugar Mills' financial performance was bolstered by a decline of approximately 12% in finance costs, which totaled Rs. 2.34 billion. This reduction was attributed to a comparatively low policy rate, although finance costs continued to exert pressure on profitability due to the company's leveraged capital structure and higher borrowing levels.
The Sugar Division remained the largest contributor, with net sales of Rs. 14.07 billion, marking a 34% increase over the previous year. Segment profit increased substantially to Rs. 2.36 billion from Rs. 55.8 million. The Ethanol Division also recorded stable performance, with net sales of Rs. 6.83 billion and segment profit improving to Rs. 252.97 million, supported by strong export demand and efficient operations.
The Flour Division, following its merger, generated net sales of Rs. 4.48 billion, with a segment profit of Rs. 123.22 million. However, the third quarter reflected a segment loss of approximately Rs. 211 million due to high operating costs and provincial restrictions on wheat procurements.
Despite these achievements, Chashma Sugar Mills faced challenges from regulatory interventions, including pricing restrictions and delayed export approvals. The domestic sugar surplus exceeded 1.1 million metric tons, with an exportable surplus of 767,000 metric tons. However, factory-gate prices and mill margins remained under pressure due to elevated sugarcane procurement costs and delayed requests.
Management remains focused on cost optimization and prudent working capital management, while anticipating potential sugar price deregulation and export opportunities to strengthen the company's financial position.