Chashma Sugar Mills Limited (PSX: CSM) has posted a strong financial turnaround for the nine-month period ended June 30, 2026, reporting a net profit of Rs139.95 million compared to a net loss of Rs1.48 billion recorded during the same period last year. The improvement was driven by robust revenue growth, stronger operating margins, and improved performance across its sugar, ethanol, and flour businesses.
The company’s net sales surged 62.3% year-on-year to Rs25.05 billion, up from Rs15.44 billion in the corresponding period of 2025. Management attributed the increase to higher sales volumes in the sugar and ethanol divisions, along with the positive contribution from the flour division following its merger.
Gross profit rose sharply to Rs4.75 billion, compared with Rs1.40 billion a year earlier, lifting the gross profit margin to 18.95% from 9.10%. Operating profit also increased significantly to Rs2.73 billion, reflecting improved production efficiency, favorable product pricing, and stronger operational performance. Finance costs declined by approximately 12% to Rs2.34 billion, although the company noted that its leveraged capital structure and higher borrowings continued to weigh on profitability.
Despite the strong performance over the nine-month period, the company reported a third-quarter net loss of Rs170.7 million, compared with a loss of Rs240 million in the same quarter last year. According to management, the quarterly result was impacted by seasonally lower operating margins, finance costs of around Rs1 billion, and the effect of the minimum tax levy.
Segment-wise, the Sugar Division remained the largest contributor, generating Rs14.07 billion in net sales and significantly improving segment profit to Rs2.36 billion. The Ethanol Division also delivered higher sales of Rs6.83 billion, with segment profit rising to Rs252.97 million, supported by strong export demand and efficient plant operations. Meanwhile, the Flour Division, following its merger, contributed Rs4.48 billion in net sales and Rs123.22 million in segment profit, although it recorded a loss during the third quarter due to elevated operating costs and provincial restrictions on wheat procurement.
Operationally, the company crushed 1.91 million metric tons of sugarcane during the 2025-26 season, achieving a 10.78% sucrose recovery rate and producing 206,312 metric tons of sugar. It also produced 28,103 metric tons of ethanol and 39,067 metric tons of flour, highlighting the benefits of its diversified operations.
Looking ahead, Chashma Sugar Mills said it remains focused on cost optimization, prudent working capital management, and completing the installation of molecular sieves at its ethanol fuel plant in Dera Ismail Khan. The company also noted that delays in sugar sector deregulation and export approvals continue to create uncertainty, while future profitability will depend on government decisions regarding exports and sugarcane support prices ahead of the next crushing season.
