NETS International Communication Reports Revenue Growth Despite Decline in Quarterly Profit
NETS International Communication Limited has reported an increase in revenue for the first quarter of financial year 2026-27, while its profitability declined compared with the corresponding period last year, according to the company’s latest unaudited financial statements for the quarter ended September 30, 2026.
The company’s financial results show that revenue increased to Rs. 471.37 million during the quarter, compared with Rs. 376.57 million in the same period of the previous year. This represents an impressive year-on-year growth of approximately 25.2%, reflecting an expansion in the company’s revenue base.
However, higher revenue did not translate into improved profitability. NETS International’s gross profit declined to Rs. 93.47 million from Rs. 103.87 million in the corresponding quarter last year. The decline indicates that the company’s cost of revenue increased at a faster pace than its sales.
Net Profit Declines by Around 70%
The company recorded a profit after taxation of Rs. 8.95 million for the quarter ended September 30, 2026, compared with Rs. 30.28 million in the same period of the previous year.
Consequently, earnings per share (EPS) declined to Rs. 0.24 from Rs. 0.82, reflecting the reduction in quarterly earnings.
Profit from operations also decreased to Rs. 25.91 million against Rs. 43.12 million in the corresponding period last year. Meanwhile, finance costs increased to Rs. 8.21 million from Rs. 5 million.
The company also recorded levies of Rs. 10.40 million during the reporting quarter, compared with no amount reported under this heading in the corresponding period last year.
Financial Position Remains Relatively Stable
According to the statement of financial position, NETS International had total assets of Rs. 1.295 billion as of September 30, 2026, compared with Rs. 1.317 billion at June 30, 2026.
The company’s total equity increased to Rs. 523.32 million from Rs. 514.36 million over the same period. Unappropriated profits also improved to Rs. 148.74 million from Rs. 139.79 million.
Current assets stood at Rs. 1.053 billion, while current liabilities amounted to Rs. 620.19 million. The company’s short-term secured borrowings decreased to Rs. 216.59 million from Rs. 225.21 million at the end of the previous financial year.
Cash Flow and Liquidity Position
The cash flow statement presents a mixed picture. Cash generated from operations increased significantly to Rs. 19.71 million during the quarter, compared with Rs. 2.78 million in the corresponding period last year.
Despite this improvement, the company reported net cash used in operating activities of Rs. 12.76 million, compared with an outflow of Rs. 22.10 million in the previous year’s corresponding quarter.
Net cash used in investing activities amounted to Rs. 3.82 million, while financing activities recorded a net cash outflow of Rs. 15.09 million.
As a result, cash and cash equivalents declined to Rs. 13.10 million at September 30, 2026, compared with Rs. 44.77 million at June 30, 2026.
Outlook for the Coming Quarters
NETS International Communication’s first-quarter results reflect a combination of revenue growth and pressure on profitability. The increase in sales is a positive development, but the decline in gross profit and net earnings highlights the importance of managing operating costs, financing expenses and overall margins.
Investors will likely monitor whether the company can maintain its revenue growth while improving profitability and cash generation in the coming quarters.
The company’s ability to control costs, strengthen margins and maintain a healthy liquidity position will remain important factors in assessing its financial performance throughout FY2026-27.
Overall, NETS International Communication started FY2026-27 with stronger revenue but lower earnings, leaving profitability improvement as an important area to watch in the remainder of the financial year.
