Faisalabad: In the fiscal year ending June 30, 2024, Crescent Textile Mills Limited (Crestex), a leading textile manufacturer in Pakistan, reported a revenue growth of 19%, reaching Rs. 23,756 million. This growth, primarily fueled by a 39% increase in export sales, comes amid significant challenges including high energy and financing costs which have deeply impacted the industry.
The company's financial health has faced severe tests due to the economic conditions and policies under the 2023 IMF SBA agreement. These include record high energy costs and interest rates, which have sharply squeezed the gross margins to 6%, a drastic reduction by 49% from the previous year. Despite the revenue increase, the cost of goods sold surged by 30% leading to an unprecedented net loss of Rs. 1,750 million, the highest in the company’s history.
According to information available from the Pakistan Stock Exchange (PSX), these results highlight the struggles of the textile sector under current economic policies. The company's detailed report notes that the governmental measures intended for macroeconomic stabilization have not only increased the cost pressures but also stifled economic activity, contributing to the company's financial difficulties.
Crestex's operational efforts have been focused on navigating these tough times with strategic initiatives such as expanding its export markets and investing in energy-efficient technologies. The company has added 80 new air jet looms and installed a 3.5 MW solar power plant, aiming to mitigate the high energy costs.
However, the fiscal year has seen the balance sheets strained, with significant impacts on shareholder value and company assets, which have decreased by Rs. 1,103 million from the previous year. The challenging environment also forced a reduction in the dividend payout, aligning with the company's focus on maintaining operational viability.
The Crescent Textile Mills remains committed to its strategic objectives and is actively looking for opportunities to improve efficiency and reduce costs in anticipation of better economic conditions in the future.