Karachi: Crescent Fibres Limited has reported a notable turnaround in its financial performance for the quarter ended September 30, 2026, marking a significant recovery from the losses incurred in the same period last year. The company announced an after-tax profit of Rs. 6.1 million, a stark contrast to the Rs. 77.9 million loss reported for the quarter ended September 30, 2025. Earnings per share were Rs. 0.49, as opposed to a loss per share of Rs. 6.27 during the corresponding quarter of the previous year.
The quarterly sales increased by 16%, rising from Rs. 1,011.7 million to Rs. 1,173.6 million. This growth is attributed to higher production volumes and improved capacity utilization at the company's operating facilities. The gross margin improved to 4.3% from a negative 0.8% in the previous period, while distribution and administrative expenses remained steady at 4.8% of sales, slightly up from 4.7% last year.
A significant boost in other operating income, which increased to Rs. 56.9 million from Rs. 18.5 million due to gains on the disposal of non-core assets and other non-recurring income, contributed positively to the financial performance. The operating margin showed a recovery at 4.2%, up from a negative 3.7% in the previous year. Financial charges decreased to 2.5% from 3.7%, reflecting lower long-term borrowing costs.
According to information available from the Pakistan Stock Exchange (PSX), the company's net margin stood at 0.5%, a recovery from the negative 7.7% recorded in the previous year's corresponding quarter. Despite these improvements, the spinning sector continues to face challenges, with the global economic outlook and domestic issues casting a shadow on future prospects.
The International Monetary Fund (IMF) has projected global growth to slow to 3.1% in 2026, citing higher energy prices, geopolitical conflicts, and supply-chain disruptions as major concerns. In Pakistan, although large-scale manufacturing grew by approximately 5% in FY26, textile output declined by 0.6%, and exports of yarn and fabric continued to fall. This highlights ongoing pressures in the downstream segment where Crescent Fibres operates.
The textile industry is grappling with high business costs, market volatility, and low domestic cotton quality. Energy tariffs remain above regional levels, impacting the competitiveness of Pakistan's textile exports. The government is urged to adopt a prudent monetary policy, address the sales tax regime, and improve liquidity by releasing delayed tax refunds.
Crescent Fibres Limited acknowledges that a significant portion of the current quarter's profit is derived from non-recurring income, emphasizing the need to maintain core operational margins for sustained profitability. The management remains committed to sound, low-risk decision-making and the disposal of non-core assets to reduce debt and bolster the balance sheet. The company extends its appreciation to its workers, directors, shareholders, and bankers for their support and dedication.