Mitchell’s Fruit Farms Limited has reported a 35.5% increase in revenue for the first quarter of fiscal year 2027, although higher operating expenses pushed the company into a net loss for the quarter ended September 30, 2026.

According to the company’s unaudited quarterly financial statements, revenue rose to Rs. 951.6 million from Rs. 702.2 million in the corresponding period last year. The growth was primarily driven by stronger domestic sales, while export sales remained below the previous year’s level.

Gross Profit Increases Amid Margin Pressure

The company’s gross profit increased by 33.6% to Rs. 238.3 million, compared with Rs. 178.4 million in the same quarter last year. However, the gross profit margin edged down to 25.0% from 25.4%, reflecting continued pressure on production and operating costs.

Mitchell’s Fruit Farms said it remains focused on improving margins through disciplined pricing, more efficient procurement and better manufacturing cost management.

Higher Expenses Lead to Operating Loss

Despite stronger revenue, the company faced a significant increase in administrative and selling expenses during the quarter. Administrative expenses climbed to Rs. 102.9 million from Rs. 56.0 million, while selling and distribution expenses surged to Rs. 285.5 million from Rs. 92.9 million.

The increase reflects the company’s continued investment in commercial activities, wider distribution coverage and organizational capabilities. Although these investments are intended to strengthen market penetration and support future growth, they placed considerable pressure on short-term profitability.

As a result, the company recorded an operating loss of Rs. 150.1 million, compared with an operating profit of Rs. 29.5 million in the corresponding quarter of the previous year.

Company Records Rs. 177.8 Million Net Loss

Mitchell’s Fruit Farms posted a net loss of Rs. 177.8 million for the quarter, against a net profit of Rs. 183.7 million in the same period last year. Earnings per share also declined to a loss of Rs. 6.93, compared with earnings of Rs. 7.16 per share previously.

The company noted that the previous year’s results included a substantial non-recurring gain from the disposal of property, plant and equipment. Consequently, the latest quarterly results more clearly reflect the challenges facing its underlying operating profitability.

Finance costs also increased to Rs. 20.6 million from Rs. 17.1 million, adding to the pressure on the company’s financial performance.

Rs. 500 Million Rights Issue Supports Expansion Plans

The company continued to utilize proceeds from its Rs. 500 million rights issue to support business requirements and planned improvements. By September 30, 2026, Rs. 265 million had been used for working capital, while the remaining Rs. 235 million was allocated for civil works, machinery replacement, renovation and process improvements.

Management expects these investments to support better operational execution, higher productivity and improved long-term returns. However, the benefits are expected to take time to materialize.

The company also reported increases in inventory and receivables during the quarter, highlighting the importance of effective working capital management and stronger cash conversion.

Outlook

Mitchell’s Fruit Farms is prioritizing sales growth, improved operating margins, manufacturing efficiency and prudent financial management. The company aims to convert its commercial investments and expanded distribution network into stronger sales productivity and more sustainable profitability.

While the increase in revenue demonstrates encouraging demand in the domestic market, the company’s performance in the coming quarters will depend on its ability to manage rising expenses, improve margins and generate adequate returns from its investments.

The first-quarter results present a mixed picture for Mitchell’s Fruit Farms: stronger revenue growth on one hand and substantial profitability pressure on the other. Investors will likely watch closely for signs that the company’s expansion and operational improvement initiatives are translating into better financial results.