Lahore: Service Global Footwear Limited (SGFL) has reported a notable increase in profits for the half-year ending June 30, 2026, despite a decline in overall revenues. According to the directors' report presented on August 28, 2026, the company achieved a profit after taxation of Rs. 2.50 billion, marking a significant move of 124.26% compared to Rs. 1.12 billion in the same period last year.
SGFL's revenue for the half-year stood at Rs. 8.10 billion, reflecting a very large move of -15.07% from the previous year's Rs. 9.54 billion. The company attributed this decline to the de-stocking phase among its U.S. and European customers, influenced by the United States' recent tariff policy revisions and other global economic factors. Nonetheless, the gross profit margin improved from 16.65% to 20.64%, a very large move of 5.27%, signaling a strategic shift towards higher-value products and better cost controls.
According to information available from the Pakistan Stock Exchange (PSX), SGFL's earnings per share saw a very large move, increasing to Rs. 12.12 from Rs. 5.41 in the same period last year. This performance was buoyed by the company's effective borrowing management and lower finance costs.
SGFL's investment in Service Long March (SLM) also proved lucrative, with the company's share of profit from SLM reaching Rs. 2.23 billion, up significantly from Rs. 1.17 billion the previous year. This growth includes a net dilution gain of Rs. 958 million, resulting from SGFL's share in the share premium reserve following the listing of SLM shares.
The directors noted that the challenging global export environment, especially in light of evolving U.S. tariff policies, did not deter SLM, which maintained its resilience and operational efficiency. The company's robust performance underscores confidence in its growth trajectory and market position.
On the economic front, Pakistan's macroeconomic conditions remained stable but cautious due to geopolitical tensions and rising energy costs. The State Bank of Pakistan projected real GDP growth between 3.5% and 4.5% for FY27, with the inflation rate easing to 11.1% in June 2026. The current account deficit narrowed to USD 139 million, supported by record workers' remittances. The State Bank's foreign exchange reserves met targets despite external pressures, and the rupee maintained stability against the US dollar.
These developments, combined with Standard & Poor's upgrade of Pakistan's sovereign credit rating to 'B', provide a constructive backdrop for SGFL's operations. The company remains optimistic about its strategic initiatives and market positioning in the upcoming quarters.