First Al-Noor Modaraba Posts Loss Amid Higher Investment and Operating Pressures
First Al-Noor Modaraba has reported a challenging financial performance for the nine-month period ended March 31, 2026, with the company recording a profit after taxation loss of Rs14.37 million, compared with a loss of Rs5.45 million in the corresponding period of the previous year. The financial statements are unaudited.
According to the condensed interim financial statements, the Modaraba generated gross income of Rs45.60 million during the nine months, compared with Rs25.41 million a year earlier. Income from investments stood at Rs13.41 million, while income from diminishing Musharakah amounted to Rs188,275. Income/(loss) from trading operations also improved substantially, reaching Rs10.97 million compared with a loss of Rs1.39 million in the same period of 2025.
Despite the improvement in revenue-generating activities, expenses remained a significant challenge. Administrative and operating expenses increased to Rs27.46 million, while financial and other charges amounted to Rs28.13 million. As a result, the company posted an operating loss of Rs1.82 million for the nine-month period.
The company’s results were further affected by an unrealised loss of Rs16.50 million on the remeasurement of investments at fair value through profit or loss. After accounting for other income, share of profit from associates, taxation and other items, the company ultimately reported a loss after taxation of Rs14.37 million.
Balance Sheet Remains Substantial
As of March 31, 2026, First Al-Noor Modaraba reported total assets of approximately Rs263.77 million, down from Rs275.02 million as of June 30, 2025. Current assets stood at around Rs228.59 million, while non-current assets were approximately Rs35.17 million.
Certificate holders’ equity was reported at approximately Rs246.84 million, compared with Rs259.06 million at the end of June 2025. The decline reflects the impact of the period’s losses on accumulated equity.
Cash Position Under Pressure
The cash flow statement also highlights pressure on the company’s liquidity during the period. First Al-Noor Modaraba recorded net cash used in operating activities of Rs6.65 million during the nine months, compared with Rs58.91 million used in the corresponding period of 2025.
Investing activities resulted in a further net cash outflow of approximately Rs14.52 million, including spending on fixed assets and investments in listed securities. Consequently, cash and cash equivalents declined from Rs34.65 million at the beginning of the period to Rs13.48 million at March 31, 2026.
Investment Performance Key to Outlook
The results suggest that investment valuations played an important role in the Modaraba’s overall performance. While income from investments and trading operations improved compared with the previous year, the substantial unrealised loss on investments weighed heavily on profitability.
For investors and certificate holders, the coming periods will therefore be important in determining whether stronger operating and investment income can offset valuation-related losses and elevated expenses.
Overall, First Al-Noor Modaraba’s nine-month results show higher gross income but weaker bottom-line performance, with investment remeasurement losses, operating costs and other charges contributing to the reported loss. The company will need to improve earnings quality and manage its investment portfolio and expenses effectively to strengthen profitability in future periods.
