ISLAMABAD: Pak Datacom Limited (PSX: PAKD) reported a sharp decline in profitability for the nine months ended March 31, 2026, as weaker revenues, rising operating costs, and challenging economic conditions weighed on the company’s financial performance.

The company posted a net profit of Rs. 12.83 million, down nearly 88% from Rs. 110.16 million recorded in the corresponding period last year. Consequently, earnings per share (EPS) fell to Rs. 1.08, compared to Rs. 9.29 a year earlier.

Net revenue declined by 16.5% to Rs. 1.066 billion, compared with Rs. 1.277 billion during the same period last year. Gross profit also contracted to Rs. 195.61 million from Rs. 311.30 million, reflecting pressure on margins despite lower cost of services.

Pak Datacom attributed the weaker performance to a combination of macroeconomic and geopolitical challenges. The company noted that elevated inflation, higher energy tariffs, increased fuel costs, and a heavy taxation environment continued to impact business activity. In addition, prolonged regional geopolitical tensions disrupted supply chains, increased import costs, delayed project execution, and slowed demand from the defense sector, one of the company’s key customer segments.

Administrative expenses increased to Rs. 184.44 million from Rs. 158.02 million, while marketing expenses rose to Rs. 46.46 million from Rs. 32.81 million. However, the company recorded other income of Rs. 76.99 million, providing some support to overall earnings during the period.

Despite the challenging environment, Pak Datacom said it remains focused on strengthening its long-term position through digital transformation initiatives, automation of internal processes, and the adoption of renewable energy solutions to reduce operating costs. The company is also expanding its ICT and data-driven services portfolio to diversify revenue streams and capitalize on growing demand for cloud-based and secure communication services.

The management expressed confidence that these strategic initiatives, combined with the ongoing digitalization of businesses and increasing demand for reliable communication infrastructure, will support the company’s long-term growth once economic conditions improve.