Saritow Spinning Mills Limited has reported a net profit of Rs5.01 million for the first quarter ended September 30, 2026, marking a significant turnaround from the loss recorded in the corresponding period last year.

According to the financial results submitted to the Pakistan Stock Exchange (PSX), the company posted a profit after taxation of Rs5.014 million during the quarter, compared with a loss of Rs25.557 million in the same period last year.

The company’s earnings per share (EPS) stood at Rs0.17, compared with a loss per share of Rs0.85 in the corresponding quarter of the previous year.

Lease Income Supports Profitability

During the quarter under review, Saritow Spinning Mills generated lease income of Rs15.44 million. Operating expenses amounted to Rs10.23 million, resulting in an operating profit of Rs5.21 million.

The company also recorded financial costs of approximately Rs195,983, bringing its profit before levies and income tax to Rs5.014 million. The reported profit after income taxes remained at the same level.

The improvement in profitability represents a notable change from the corresponding period last year, when the company reported a loss of Rs25.56 million. However, the previous year’s comparative figures were reported under discontinued operations, while the current quarter reflects continuing operations.

Financial Position and Liabilities

According to the company’s balance sheet, total assets stood at Rs921.34 million as of September 30, 2026, compared with Rs1.082 billion at the end of June 2026.

Total liabilities declined to Rs809.25 million from Rs974.60 million over the same period. Trade and other payables decreased to Rs255.87 million from Rs415.39 million.

Meanwhile, short-term borrowings remained almost unchanged at Rs541.98 million, indicating that the company continues to carry a substantial short-term borrowing balance.

The company’s cash and bank balances declined to approximately Rs9.99 million from Rs33.36 million at the end of the previous financial year.

Cash Flow Remains an Important Concern

Despite returning to profitability, Saritow Spinning Mills experienced pressure on its operating cash flows.

The company reported net cash used in operating activities of Rs150.77 million during the quarter. Meanwhile, proceeds from the disposal of property, plant and equipment amounted to Rs127.40 million.

Consequently, cash and cash equivalents decreased by Rs23.37 million during the quarter, bringing the closing balance to approximately Rs9.99 million.

This indicates that while the company has returned to profitability, maintaining sufficient liquidity and improving cash generation will remain important challenges.

No Dividend Announced

The board of directors, which met on October 28, 2026, approved the company’s first-quarter financial results. The board did not announce any cash dividend, bonus shares or right shares for shareholders.

The company also reported no other price-sensitive information alongside the financial results.

Outlook

Saritow Spinning Mills’ return to profitability is a positive development for the company following the loss reported in the corresponding period last year. Its lease income and lower operating expenses supported the improved financial performance.

However, declining cash balances and substantial short-term borrowings remain areas that investors may want to monitor in upcoming financial reports.

The company’s ability to sustain profitability, strengthen its cash position and manage its financial obligations will be important factors in determining its financial performance during the remaining quarters of FY2026-27.