Elahi Cotton Mills Limited has reported a significant decline in financial performance for the year ended June 30, 2026, with the company moving from a profit in the previous year to a sizeable loss. According to the company’s financial statements, the board recommended no cash dividend, bonus shares or right shares for the year.

The company’s sales stood at Rs949.91 million during FY2026, compared with Rs996.62 million in FY2025. Despite the relatively modest decline in revenue, the company’s cost of sales remained extremely high at Rs949.70 million, leaving a gross profit of only Rs219,179, compared with gross profit of Rs41.64 million a year earlier.

Operating performance weakens sharply

The pressure on profitability continued below the gross-profit level. Administrative expenses increased to Rs19.26 million from Rs14.10 million, while selling and distribution expenses rose to Rs3.54 million from Rs2.46 million.

As a result, Elahi Cotton Mills recorded an operating loss of Rs23.55 million for FY2026, compared with an operating profit of Rs22.61 million in FY2025.

After accounting for other income and finance costs, the company posted a loss before levies and taxation of Rs23.04 million, against a profit of Rs23.05 million in the previous year. Levies of Rs11.88 million further increased the loss before taxation to Rs34.92 million. The company reported no taxation expense for the year.

The resulting loss for the year was Rs34.92 million, compared with a profit of Rs10.59 million in FY2025. Loss per share stood at Rs26.86, compared with earnings per share of Rs8.15 in the previous year.

Asset base expands

Despite the deterioration in earnings, the company’s balance sheet showed growth in total assets. As of June 30, 2026, total assets amounted to Rs362.40 million, compared with Rs276.53 million a year earlier.

Property, plant and equipment increased substantially to Rs253.66 million from Rs174.90 million. The company also reported a revaluation surplus on property, plant and equipment of approximately Rs220.60 million, compared with Rs138.41 million in FY2025.

Current assets stood at approximately Rs103.23 million, with stock in trade at Rs50.60 million and trade debts at Rs31.95 million. Cash and bank balances, however, declined to Rs9.93 million from Rs10.16 million.

Cash flow remains under pressure

The cash flow statement shows that the company used Rs12.55 million in operating activities during FY2026, compared with Rs6.45 million used in the previous year. The company also recorded a relatively small Rs128,292 net cash outflow from investing activities.

Financing activities generated Rs12.45 million, primarily reflecting net short-term borrowing from directors after lease payments. Overall, cash and cash equivalents declined by Rs225,672 during the year, leaving the company with Rs9.93 million at June 30, 2026.

No dividend announced

For FY2026, the board recommended no cash dividend, bonus shares or right shares, while no other corporate action or price-sensitive information was reported in the financial announcement. The company has scheduled its Annual General Meeting for October 26, 2026 at 10:00 a.m. at its registered office in Islamabad.

Outlook

Elahi Cotton Mills enters the new financial year after a challenging FY2026 in which revenue declined, gross margins contracted sharply and the company moved from profitability to a substantial loss. At the same time, its asset base expanded considerably, particularly through higher property, plant and equipment and the revaluation surplus.

The financial results highlight the importance of restoring operating margins and improving the relationship between production costs and sales revenue. The company’s ability to strengthen core operations and manage costs will be important factors in determining its financial performance in the coming period.