Lahore: In its 35th Annual Report, Redco Textiles Limited has disclosed a significant reduction in profit after taxation for the year ended June 30, 2026. The report, presented by the company's directors in compliance with Section 227 of the Companies Act, 2017, highlights a challenging operational environment for the textile manufacturer, marked by inflationary pressures and high energy costs.
The annual report, dated October 6, 2026, shows that Redco Textiles, which specializes in the manufacturing and sale of yarn and greige fabric, recorded net sales of Rs. 1,796 million. This represents a minor move with a decrease of approximately 0.25% from the previous year's sales of Rs. 1,800 million. Despite a slight increase in gross profit to Rs. 260 million from Rs. 259 million the previous year, profit after taxation plummeted to Rs. 5.57 million, a sharp decline from Rs. 175.63 million in the prior year.
The company's operational and financial performance was significantly affected by increased operating expenses. Other operating expenses surged to Rs. 118.87 million from Rs. 20.08 million in the previous year, primarily due to an impairment loss of Rs. 87.91 million on property, plant, and equipment. Additionally, a deferred tax expense of Rs. 90.68 million further impacted profitability.
According to information available from the Pakistan Stock Exchange (PSX), Redco Textiles' operating profit decreased notably to Rs. 107.58 million from Rs. 207.98 million in the preceding year. The earnings per share also saw a significant move, dropping to Rs. 0.113 from Rs. 3.563.
The report outlines several risks and uncertainties that continue to challenge the company, including competitive pressures on local sales margins, volatile energy prices, and market disruptions due to political and economic uncertainties within Pakistan. Despite these challenges, the company reported no defaults on loan or debt repayments during the year under review.
In response to these challenges, Redco Textiles has been focusing on cost control, operational efficiency, and effective working capital management. The company remains committed to maintaining strong relationships with its stakeholders while investing in the professional development of its workforce to ensure long-term sustainability.
As of the report's publication date, no subsequent events were noted that would materially affect the company's performance or financial position. The directors did not report any changes in the nature of the business during the financial year.