Karachi: Gul Ahmed Textile Mills Limited, a key player in Pakistan's textile industry, has reported a challenging financial year ending on June 30, 2026, amid global economic instability and internal strategic decisions aimed at restructuring. The financial results were disclosed in the company's annual report dated October 6, 2026, highlighting a year of significant operational adjustments and financial setbacks.
The company, which operates within the designated market category of textiles, faced a substantial decline in export sales, which fell by 20.59% to Rs. 113.63 billion from Rs. 143.09 billion in the previous fiscal year. This decrease in exports was partly offset by a 17.91% increase in local sales, reaching Rs. 17.46 billion, as Gul Ahmed sought to strengthen its domestic market presence.
According to information available from the Pakistan Stock Exchange (PSX), the company's net sales dropped 16.98% to Rs. 131.09 billion, compared to Rs. 157.91 billion last year. The financial report attributes this decline to a combination of external market pressures and internal strategic shifts, including the closure of its Export Apparel segment and the decision to keep a significant portion of its spinning capacity idle until March 2026.
The company's gross profit experienced a notable 47.05% decrease, amounting to Rs. 10.01 billion, with a gross margin dropping to 7.63% from 11.97% the previous year. Profit before tax fell sharply by 87.28% to Rs. 855 million, and the year concluded with a loss after tax of Rs. 923 million, in stark contrast to a profit of Rs. 4,023 million in FY 2025.
Gul Ahmed's directors reported that the company's financial difficulties were exacerbated by global economic conditions, notably the largest oil supply shock on record due to conflict in the Middle East. This situation led to a forecasted average Brent oil price of USD 86 per barrel in 2026, significantly higher than the previous year's USD 69. Consequently, global disinflation stalled, with headline inflation expected to average 4.7% in 2026.
In Pakistan, the economic recovery continued, with GDP growth reaching 3.7%, although it remained below the government's target. Large Scale Manufacturing experienced a 4.98% growth, while the textile sector saw a modest 0.26% increase in exports, with cotton yarn leading the growth at 12.40%. However, the country's merchandise exports suffered a 5.93% decline, highlighting the challenges faced by the export-driven textile industry.
The report underscores the company's focus on long-term sustainability through strategic realignment, despite the immediate financial challenges. The company's transformation plan, which prioritizes a stronger balance sheet and cost control, aims to navigate the evolving economic landscape and position Gul Ahmed for future growth.