Dewan Farooque Spinning Mills Sees Revenue Growth Despite Persistent Losses

Dewan Farooque Spinning Mills Limited has reported a challenging financial performance for the year ended June 30, 2026, with a notable increase in revenue but continued losses during the year.

According to the company’s financial results, net sales/revenue rose to Rs275.15 million in FY2026 from Rs219.25 million in FY2025, representing an increase of around 25.5%. However, the higher revenue was not sufficient to offset the company’s cost structure and operating expenses. 283683

Loss Remains Above Rs210 Million

The company recorded a gross loss of Rs241.29 million during FY2026, compared with a gross loss of Rs239.68 million in the previous year. Operating loss also remained high at approximately Rs275.51 million, compared with Rs274.46 million in FY2025.

After accounting for other income, bank charges and levies, Dewan Farooque Spinning Mills reported a loss before taxation of Rs266.71 million. After taxation, the company’s net loss stood at Rs210.68 million, compared with a loss of Rs213.30 million in FY2025.

This represents a modest improvement in the bottom line despite the company continuing to operate at a significant loss. The loss per share improved slightly to Rs2.16, compared with Rs2.18 in the previous year. 283683

Financial Position Remains Under Pressure

The company’s statement of financial position shows total assets of approximately Rs11.94 billion as of June 30, 2026, compared with Rs12.15 billion a year earlier. Equity and reserves declined to approximately Rs9.52 billion, from Rs9.73 billion at June 30, 2025.

Accumulated losses increased further, reaching approximately Rs2.21 billion by the end of FY2026. The company also reported current liabilities of around Rs1.85 billion, highlighting the continued pressure on its financial position. 283683

Cash Position Remains Limited

Cash flow figures also indicate a difficult operating environment. Cash generated from operations before certain payments remained negative, while the company recorded a net cash outflow from operating activities after payments.

At the end of FY2026, cash and cash equivalents stood at only about Rs3.23 million, down from approximately Rs4.99 million a year earlier.

The financial statements also state that the auditors expressed a qualified opinion concerning default in repayment of installments of restructured liabilities and non-payment of markup, while also adding an emphasis paragraph regarding the company’s going-concern position. 283683

No Dividend Recommended

The board did not recommend a cash dividend, bonus shares, right shares or any other corporate entitlement for FY2026. This reflects the company’s continuing losses and financial pressures.

The company has also announced that its Annual General Meeting will be held on October 26, 2026, in Karachi. The share transfer books are scheduled to remain closed from October 19 through October 26, 2026. 283683

Outlook

Dewan Farooque Spinning Mills’ FY2026 results present a mixed picture. The substantial increase in revenue is encouraging, but the company continues to face heavy production and operating costs that have prevented the higher sales from translating into profitability.

The modest reduction in annual net loss provides some improvement compared with FY2025, but the continued negative operating performance, accumulated losses, limited cash position and auditor’s going-concern emphasis remain important concerns.

For the company, the key challenge will be converting its improved revenue base into sustainable margins while addressing its financial obligations and strengthening cash generation.