Karachi: Faran Sugar Mills Limited has announced its financial results for the nine months ending on June 30, 2026, showcasing a noteworthy recovery despite ongoing market challenges. According to the company's third quarterly accounts, the firm reported a net profit after taxation of Rs. 10.75 million, a significant improvement from a net loss after taxation of Rs. 131.87 million in the same period last year.
The report, dated July 29, 2026, outlines a gross turnover increase to Rs. 9.82 billion, up from Rs. 9.42 billion in June 2025. Gross profit also rose to Rs. 674.96 million from Rs. 495.60 million over the same period. Financial costs were reduced to Rs. 427.85 million from Rs. 603.12 million the previous year, while the share of profit from associates increased to Rs. 223.39 million from Rs. 119.42 million.
The domestic sugar market experienced significant volatility due to a sharp rise in production, which exceeded initial estimates. Actual production reached approximately 7.7 million tons, compared to 5.9 million tons in the 2024-25 season. With the Federal Government yet to approve sugar exports despite surplus stock, this oversupply has pressured sugar prices below production costs.
In response to these market conditions, Faran Sugar Mills implemented a strategic sales approach, ensuring timely sales commitments and effective customer management. This approach allowed the company to leverage favorable market conditions, maintain optimal stock levels, and manage cash flows efficiently. The company's proactive strategy resulted in a profit before taxation of Rs. 282.86 million.
However, profitability was impacted by deferred tax expenses and a Super Tax levy, totaling Rs. 169 million. This led to the net profit after taxation of Rs. 10.75 million. The earnings per share also improved to Rs. 0.27 from a loss of Rs. 3.72 per share in the previous year.
According to information available from the Pakistan Stock Exchange (PSX), Faran Sugar Mills' performance reflects a very large move in its net profit after taxation compared to the previous year. The challenges faced by the sugar industry indicate that the domestic market is not yet robust enough to handle surplus production and stabilize prices through regular market mechanisms.
Additionally, Unicol Limited, a joint venture company, recorded a consolidated operating profit of Rs. 1.77 billion for the third quarter, with a profit after tax of Rs. 671 million. Faran Sugar Mills' share of profit from associates was reported at Rs. 223 million. Despite geopolitical disruptions affecting freight and shipments, Unicol maintained its core profit margins through strong cost controls and diversified sales.
The ongoing market challenges highlight the need for policy clarity and regulation to address issues of informal market participants and regulatory loopholes. The Sindh Government has expressed concerns over immediate deregulation, emphasizing support for growers within the deregulated regime. Efforts by the Pakistan Sugar Mills Association (PSMA) continue to advocate for a deregulated sugar economy, supported by the KPK and Punjab regions.