Pak Leather Crafts Limited has reported a net loss of Rs5.33 million for the financial year ended June 30, 2026, compared with a net profit of Rs9.02 million in the previous financial year, reflecting a significant deterioration in the company’s financial performance.

According to the company’s financial results submitted to the Pakistan Stock Exchange (PSX) on October 5, 2026, annual sales fell sharply, while operating expenses and other costs contributed to the loss.

Sales Decline Significantly

Pak Leather Crafts recorded sales of Rs26.78 million in FY2026, compared with Rs60.09 million in FY2025, representing a decline of approximately 55.4%.

The substantial reduction in revenue affected the company’s gross profit, which dropped to Rs3.97 million from Rs16.64 million a year earlier.

Despite the decline in sales, other income remained relatively stable at Rs9.45 million, compared with Rs9.35 million in the previous financial year. However, this income was insufficient to offset the impact of lower gross profit and higher administrative expenses.

Company Moves Into Operating Loss

The company’s operating performance weakened considerably during the year. Pak Leather Crafts reported an operating loss of Rs3.12 million, compared with an operating profit of Rs10.13 million in FY2025.

Administrative expenses increased to Rs15.20 million from Rs13.41 million. Meanwhile, selling and distribution expenses declined to Rs840,548 from Rs1.60 million, while finance costs decreased to Rs492,814 from Rs850,637.

Other operating expenses also increased to Rs1.42 million from Rs948,324, adding further pressure to the company’s financial results.

Consequently, the company recorded a loss before levy and taxation of Rs4.54 million, compared with a profit of Rs9.18 million in the preceding year.

After accounting for the provision for levy and taxation, the company’s net loss stood at Rs5.33 million.

Earnings Per Share Turn Negative

The decline in profitability was also reflected in the company’s earnings per share (EPS). Pak Leather Crafts reported a loss per share of Rs1.57 for FY2026, compared with positive earnings of Rs2.65 per share in FY2025.

The change highlights the impact of lower sales and weaker operating performance on shareholder returns.

Financial Position and Cash Flows

The company’s total assets declined to Rs67.03 million as of June 30, 2026, from Rs77.55 million a year earlier.

Stock in trade decreased to Rs30.75 million from Rs35.80 million, while trade debts increased to Rs10.32 million from Rs5.53 million. Cash and bank balances improved to Rs1.14 million from Rs521,660.

Net cash generated from operating activities fell to Rs6.21 million from Rs25.14 million in the previous year. The company also reported net cash outflows of Rs1.55 million from investing activities and Rs4.04 million from financing activities.

The balance sheet shows short-term borrowings of Rs111.00 million and a loan from directors of Rs117.38 million at the end of FY2026. Accumulated losses increased to Rs358.69 million, compared with Rs353.35 million a year earlier.

These figures indicate that the company continues to face financial pressure, particularly in maintaining profitability and managing its liabilities.

No Dividend Announced

The company has not recommended a cash dividend, bonus shares, or right shares for the financial year ended June 30, 2026. The board’s decision means shareholders will not receive a distribution through these measures for the reported period.

Outlook

Pak Leather Crafts’ FY2026 results underline the challenges facing the company, with lower sales, reduced gross profit, and a shift from profitability to a net loss.

The company’s future performance will depend on its ability to improve sales, strengthen margins, control operating expenses, and manage its borrowing requirements. Investors will likely monitor subsequent financial disclosures for signs of a recovery in revenue and profitability.

Conclusion: Pak Leather Crafts Limited closed FY2026 with a net loss of Rs5.33 million, compared with a profit of Rs9.02 million in FY2025. The sharp decline in sales and operating profit highlights the need for improved business performance as the company enters the next financial year.