Shams Textile Mills Shows Significant Improvement in FY2026 Despite Continued Net Loss
Shams Textile Mills Limited reported a substantial improvement in its financial performance for the year ended June 30, 2026, although the company remained in a loss position. The latest financial statements show stronger gross and operating profitability, a significant reduction in the net loss, and an improvement in the company’s cash position.
According to the financial statements, revenue from contracts with customers declined to Rs3.757 billion in FY2026 from Rs4.105 billion in the previous year. Despite the lower revenue, the company’s gross profit increased sharply to Rs271.9 million, compared with Rs91.98 million in FY2025.
Operating Performance Improves
The improvement was also visible at the operating level. Shams Textile Mills recorded a profit from operations of Rs164.8 million during FY2026, compared with only Rs8.18 million a year earlier.
Distribution costs declined to Rs22.05 million from Rs25.62 million, while administrative expenses increased moderately to Rs129.81 million from Rs121.15 million. Other expenses remained relatively small at Rs0.57 million.
Other income amounted to Rs45.28 million, compared with Rs63.76 million in FY2025. After taking these factors into account, the company generated substantially higher operating profitability during the year.
Net Loss Falls Considerably
Finance costs remained a major pressure on the bottom line, rising to Rs161.70 million from Rs105.65 million in the previous year. As a result, profit before levy and taxation stood at Rs3.08 million.
After a levy of Rs47.25 million, the company reported a loss before taxation of Rs44.16 million. The loss after taxation was also Rs44.16 million, significantly lower than the Rs137.19 million loss recorded in FY2025.
The loss per share consequently improved to Rs5.11, compared with Rs15.88 per share in the preceding year.
Equity Position
The company’s total equity stood at Rs736.08 million as of June 30, 2026, compared with Rs779.86 million a year earlier. The decline primarily reflects the loss recorded during the year.
The statement of changes in equity shows that accumulated losses increased to Rs70.26 million, while total reserves stood at Rs649.68 million at the end of FY2026.
Assets and Borrowings
Total assets increased to approximately Rs2.685 billion from Rs2.606 billion. Current assets rose to around Rs1.559 billion, while non-current assets stood at approximately Rs1.103 billion.
The balance sheet also shows significant short-term borrowing of Rs890.54 million, compared with Rs733.55 million in FY2025. Trade and other payables amounted to Rs623.99 million, while total liabilities increased to approximately Rs1.949 billion.
Cash Flow Remains an Area to Watch
The cash-flow statement presents a mixed picture. Although cash generated from operations reached Rs132.68 million, finance costs and taxes paid resulted in net cash used in operating activities of Rs99.20 million during FY2026.
The company also used Rs54.33 million in investing activities, including Rs78.93 million in capital expenditure on property, plant and equipment.
Financing activities generated net cash of Rs183.93 million, supported largely by short-term borrowing obtained during the year. As a result, cash and cash equivalents increased from Rs28.46 million at June 30, 2025 to Rs58.86 million at June 30, 2026.
A Year of Operational Recovery
Overall, Shams Textile Mills’ FY2026 results show a notable improvement in operating performance despite lower sales. The sharp increase in gross profit and operating profit, combined with a substantial reduction in the annual loss, indicates that the company made progress in improving profitability during the year.
However, higher finance costs, increased short-term borrowing and negative net operating cash flow remain important financial considerations. The company ended FY2026 with a stronger operating result and a smaller loss, while its future performance will depend on sustaining margins, managing financing costs and improving cash generation.
