Karachi: Pakistan Oxygen Limited has reported resilient financial performance for the first quarter of 2025, despite the challenging macroeconomic conditions faced by the country. According to the Directors' Review presented alongside the Condensed Interim Financial Statements for the quarter ended March 31, 2025, the company achieved significant growth in both sales and profitability.
Pakistan's economic landscape in early 2025 was marked by sluggish GDP growth, inflationary pressures, and high interest rates. These factors contributed to reduced overall economic activity and a contraction in the Large-Scale Manufacturing (LSM) sector, impacting industries such as Chemicals, Fertilizers, Steel, and Food & Beverages. Despite these hurdles, Pakistan Oxygen Limited demonstrated resilience, achieving solid growth during this period.
The company's net sales for Q1 2025 reached Rs 2.90 billion, marking a 3% increase compared to the same period last year. This growth was primarily driven by a robust performance in the Healthcare segment, which saw a 14% year-on-year increase due to sustained demand for medical gases and related services. The Welding products segment also recorded a 14% growth, driven by increased demand for key electrode brands. In the Industrial Gases segment, improved pricing and product mix helped offset softer volumes, continuing to contribute steady sales.
Gross profit for the quarter amounted to Rs 996 million, representing a significant 41% increase compared to the same period last year. This boost was attributed to margin improvements and enhanced production efficiency. Overheads, excluding Workers' Profit Participation Fund (WPPF) and Workers' Welfare Fund (WWF), were reduced by 8%, while finance costs declined by 47% due to a lower policy rate. Consequently, the profit before tax for the period was Rs 644 million, up by 116% compared to the same period last year.
After accounting for a higher levy and an effective tax rate of 39%, including a Super Tax of Rs 65 million, the profit after tax stood at Rs 391 million, with earnings per share (EPS) recorded at Rs 4.49. This reflected a substantial 119% increase compared to the same period last year.
According to information available from the Pakistan Stock Exchange (PSX), Pakistan Oxygen Limited's performance underscores its ability to navigate economic challenges effectively. The company remains cautiously optimistic about the remainder of 2025, with early signs of potential recovery in Pakistan's industrial activity. LSM is anticipated to rebound modestly, supported by government stabilization measures and improving business confidence. While inflation remains elevated, it is expected to decline later in the year.
As part of the designated market category, the company is focused on sustaining its performance amidst external challenges through operational excellence and prudent margin management for the fiscal year 2025.