Habib Rice Products Limited has reported a net loss of Rs55.09 million for the first quarter ended September 30, 2026, compared with a loss of Rs18.36 million in the same period last year, as lower sales and rising operating expenses weighed on its financial performance.

According to the company’s unaudited financial results submitted to the Pakistan Stock Exchange (PSX) on October 26, 2026, the company’s financial performance weakened during the quarter, with earnings per share declining further into negative territory.

Sales and Gross Profit Decline

Habib Rice Products recorded net sales of Rs468.86 million during the July–September quarter, down from Rs497.96 million in the corresponding period of the previous year. This represents a decline of approximately 5.8%.

The company’s cost of sales decreased to Rs447.98 million from Rs454.12 million a year earlier. However, the reduction was insufficient to offset the impact of lower revenue, resulting in gross profit falling to Rs20.88 million from Rs43.84 million.

The decline in gross profit highlights the pressure on the company’s margins during the reporting period.

Higher Expenses Increase Loss

The company’s expenses remained a significant challenge during the quarter. Distribution costs increased to Rs29.58 million from Rs20.55 million in the same period last year, while administrative expenses rose to Rs37.27 million from Rs33.89 million.

Finance costs also increased to Rs4.03 million compared with Rs1.12 million a year earlier, adding further pressure to the company’s bottom line.

Although other income improved to Rs671,540 from Rs222,204, this increase was not enough to compensate for the higher expenses and lower gross profit.

Consequently, the loss before levies and income tax reached Rs49.22 million, compared with Rs12.22 million in the corresponding quarter of 2025. After levies, the company reported a net loss of Rs55.09 million, significantly higher than the previous year’s loss of Rs18.36 million.

Loss Per Share Widens

Habib Rice Products reported a basic and diluted loss per share of Rs1.38 for the quarter, compared with a loss per share of Rs0.46 in the same period last year.

The deterioration in earnings per share reflects the company’s weaker profitability and may remain an important consideration for investors assessing its financial performance.

Balance Sheet Shows Lower Borrowings

Despite the increase in quarterly losses, the company’s balance sheet showed some changes in its financing position.

Total assets stood at approximately Rs1.50 billion as of September 30, 2026, compared with Rs1.51 billion at the end of June 2026.

The company’s cash and bank balances increased to Rs19.07 million from Rs10.96 million. Meanwhile, secured short-term borrowings declined to Rs103.73 million from Rs171.52 million, indicating a reduction in short-term borrowing during the quarter.

Total current liabilities also decreased to Rs593.84 million from Rs684.17 million at the end of the previous financial year.

The financial statements additionally recorded a sponsor contribution of Rs139.03 million during the quarter. This contribution played a significant role in the company’s financing cash flows and overall equity position.

Operating Cash Flow Remains Negative

The company’s cash flow statement showed continued pressure from operating activities. Net cash used in operating activities amounted to Rs36.52 million during the quarter, compared with Rs41.67 million in the same period last year.

Net cash used in investing activities stood at Rs20.94 million, while financing activities generated net cash of Rs133.36 million, primarily supported by the sponsor contribution.

The company’s cash and cash equivalents at the end of the period were reported at Rs15.34 million, compared with Rs8.91 million at the end of the corresponding quarter last year.

These figures indicate that financing support helped offset cash outflows from operating and investing activities during the reporting period.

Outlook for Investors

Habib Rice Products’ first-quarter results point to continued challenges in maintaining profitability. Lower sales, a substantial reduction in gross profit and higher distribution, administrative and finance costs contributed to the increased loss.

The decline in short-term borrowing and the sponsor contribution provided some support to the company’s financial position. However, improving operating performance and generating stronger cash flows will remain important priorities in the coming quarters.

Investors will likely monitor the company’s upcoming financial results for signs of recovery in sales, gross margins and expense management.

The company has submitted its unaudited financial statements for the first quarter ended September 30, 2026, to the Pakistan Stock Exchange. Its future performance will depend on its ability to improve profitability and strengthen its operating cash generation.