Karachi: The directors of Nadeem Textile Mills Limited reported a substantial decline in the company's financial performance for the fiscal year ended June 30, 2026. The audited financial statements reveal a sales turnover of Rs. 2.12 billion, marking a significant 56.56% drop from the previous year's turnover of Rs. 4.89 billion. The company also reported a net loss after tax of Rs. 890 million for the period.
The company's principal activity, manufacturing and selling yarn, faced considerable challenges, including reduced production capacity utilization and increased costs for raw materials, fuel, power, and other business operations. This led to a gross loss of Rs. 278.72 million, compared to a gross loss of Rs. 527.18 million in the prior year. The gross loss percentage to sales deteriorated to 13.11% from 10.77%.
According to information available from the Pakistan Stock Exchange (PSX), the textile sector, being Pakistan's largest export-oriented industry, experienced significant pressures. The broader industry faced high energy costs, expensive raw materials, intense competition, and limited profit margins, impacting both operational performance and profitability.
The company's financial report indicates a loss per share of Rs. 41.84 for the year ending June 30, 2026, an improvement from the previous year's Rs. 62.94 loss per share. Despite the reduced losses, the break-up value per share fell to Rs. 89.98 from Rs. 129.12.
The Board of Directors did not recommend any dividend, citing the company's working capital requirements and financial performance. Efforts are being made to improve operational efficiency and cost management, alongside diversifying marketing activities, to recover from the downturn.
The company produced 4 million kilograms of 20/s count of spun yarn during the year, a reduction from the previous year's 9.22 million kilograms, highlighting a 56.56% decrease. This decline is attributed to high input costs, quality cotton shortages, and limited working capital.
The company's management remains focused on better utilization of production capacity, effective cost control, and prudent working capital management to navigate the challenging economic environment. The pace of recovery, however, is contingent on industry conditions, raw material availability, energy costs, market demand, and broader economic factors.