KARACHI: First Al-Noor Modaraba reported a challenging financial year ended June 30, 2026, as the company moved from a profit in the previous year to a loss after tax, according to its latest financial statements.

The Modaraba posted a loss after taxation of Rs2.80 million for FY2026, compared with a profit of Rs2.41 million in FY2025. The shift reflects pressure on revenue, higher operating expenses and losses on the remeasurement of investments.

Revenue declines during the year

First Al-Noor Modaraba generated net revenue of Rs35.14 million during FY2026, down from Rs43.66 million a year earlier. Income from trading operations increased to Rs18.31 million from Rs15.82 million, while profit on diminishing Musharakah financing stood at Rs77,233.

However, income from investments fell considerably to Rs16.76 million, compared with Rs25.65 million in FY2025. This decline was a major factor behind the weaker overall revenue performance.

Expenses remain a major pressure point

Administrative and operating expenses increased to Rs37.72 million from Rs36.50 million in the previous year. Other income, however, improved to Rs7.07 million from Rs2.63 million.

The company also recorded an unrealised loss of Rs6.78 million on the remeasurement of investments at fair value through profit or loss, compared with a loss of Rs4.56 million in the previous year.

As a result, First Al-Noor reported a loss before taxation of Rs3.74 million, against a pre-tax profit of Rs2.59 million in FY2025. After taxation, the loss stood at Rs2.80 million, translating into a basic and diluted loss per certificate of Rs0.12, compared with earnings per certificate of Rs0.10 last year.

Assets remain broadly stable

Despite the weaker earnings, the Modaraba’s total assets remained relatively stable at Rs274.58 million as of June 30, 2026, compared with Rs275.10 million a year earlier.

Cash and bank balances, however, declined sharply to Rs69.96 million from Rs133.92 million. At the same time, stock in trade increased to Rs105.82 million from Rs68.26 million.

The company’s issued, subscribed and paid-up certificate capital remained unchanged at Rs231 million, while total equity declined to Rs255.78 million from Rs259.02 million.

Cash flow comes under pressure

The cash flow statement also highlighted a difficult year. First Al-Noor recorded net cash used in operating activities of Rs48.75 million, compared with net cash generated of Rs40.12 million in FY2025.

Investing activities used a further Rs15.21 million, mainly reflecting purchases of fixed assets and other investment-related movements. Consequently, cash and cash equivalents fell from Rs133.92 million at the beginning of the year to Rs69.96 million at year-end.

Outlook

First Al-Noor Modaraba’s FY2026 results underline the pressure facing its earnings, particularly from weaker investment income, increased operating costs and valuation losses on investments. While the balance sheet remains relatively stable in terms of total assets, the substantial decline in cash and the swing into a net loss will remain key areas for investors to watch.

The financial statements were signed on August 31, 2026, and cover the year ended June 30, 2026.