Karachi: The Khyber Tobacco Company has reported robust financial results for the first quarter ending September 30, 2026, marking a strong start to the fiscal year. The company's net sales nearly doubled, and profit after tax rose almost five-fold compared to the same quarter last year, driven by higher leaf tobacco exports.

The company's gross turnover for the quarter stood at Rs. 4,970.45 million, up by 65% from Rs. 3,003.55 million in the corresponding period last year. Net turnover increased by 91% to Rs. 3,026.40 million from Rs. 1,581.64 million. According to information available from the Pakistan Stock Exchange (PSX), the financial results reflect a significant improvement in the company's performance, with a 233% increase in gross profit to Rs. 876.88 million from Rs. 263.46 million last year.

Profit before tax surged to Rs. 479.25 million, a substantial increase from Rs. 39.12 million in the previous year. The profit after tax reached Rs. 180.89 million, compared to Rs. 36.97 million, reflecting a 389% increase. Earnings per share rose to Rs. 26.13, up from Rs. 5.34, showcasing a stronger operating performance.

The company's gross margin improved to 29.0% from 16.7% in the previous year, as higher sales volumes aided in better absorption of fixed production costs. Export sales doubled to Rs. 2,410.90 million, while net local sales increased by 64% to Rs. 615.51 million, bolstered by a 41% rise in local cigarette sales volume.

During the quarter, the company purchased 5.85 million kg of green leaf tobacco at an average price of Rs. 722 per kg and exported 2.98 million kg of leaf tobacco, a significant rise from 0.82 million kg the previous year. The company also increased local cigarette production to 32,117 cartons from 13,075 cartons.

Despite the positive financial performance, the company faced higher finance costs of Rs. 146.82 million, up from Rs. 59.32 million, primarily due to markup on loans from sponsors. Selling and distribution costs rose to Rs. 92.87 million, linked to the growth in exports.

The State Bank of Pakistan maintained the policy rate at 11.5% during the quarter, raising it to 12% on October 26, 2026. The macroeconomic environment presented challenges, with headline inflation reaching 11.1% in August and 10.3% in September 2026, influenced by rising energy and food prices due to the Middle East conflict.

Looking ahead, the company aims to sustain export volumes, maintain cost discipline, and reduce financing costs as key priorities for the remaining quarters of the fiscal year.