Dewan Salman Fibre Reports Significant Reduction in Loss for FY2026

Dewan Salman Fibre Limited has reported a substantial improvement in its financial performance for the year ended June 30, 2026, although the company remained in loss and its auditors continued to raise concerns about its ability to operate as a going concern.

According to the financial results submitted to the Pakistan Stock Exchange, the company recorded a loss for the year of Rs131.786 million, compared with a much larger loss of Rs380.033 million in FY2025. The loss per share also improved considerably, declining to Rs0.36 per share from Rs1.04 per share a year earlier. 283685

Finance Costs Fall Sharply

One of the most notable changes during the year was the reduction in finance costs. Finance costs fell to approximately Rs16.7 million, compared with Rs143.8 million in FY2025. The company also reported other income of around Rs29.4 million, while other charges stood at approximately Rs19.4 million. 283685

Despite these improvements, the company continued to face significant operating challenges. The financial statement shows a gross loss of approximately Rs254.8 million, compared with Rs283.0 million in the previous year. Operating expenses were also lower at around Rs60.0 million versus Rs62.9 million in FY2025.

Negative Equity Remains a Major Challenge

The company’s financial position continues to reflect the impact of accumulated losses. As of June 30, 2026, accumulated losses had reached approximately Rs23.65 billion, while total equity stood at a negative Rs18.01 billion. 283685

The statement of financial position shows total liabilities of approximately Rs21.68 billion, compared with total assets of around Rs4.31 billion. Current liabilities alone stood at approximately Rs21.68 billion, highlighting the considerable financial pressure facing the company. 283685

Cash Position Remains Under Pressure

The cash-flow statement also highlights the company’s difficult financial position. Net cash flows from operating activities were slightly negative at approximately Rs23.7 million during FY2026. Cash and cash equivalents at the end of the year were reported at approximately negative Rs2.95 billion, broadly similar to the previous year. 283685

The company did, however, record a small inflow from the sale of fixed assets, with net cash generated from investing activities amounting to approximately Rs1.5 million.

Auditors Raise Going-Concern Issues

The most serious warning in the financial statements comes from the auditors. The document states that the auditors expressed an adverse conclusion on the going-concern assumption, citing the closure of operations, cases by lenders related to non-payment of liabilities, and related non-provisioning of mark-up.

The auditors also pointed to issues involving valuation of investments under the equity method, non-provisioning for doubtful debts, physical verification of stocks, and valuation of impairment of property, plant and equipment. 283685

These observations indicate that, despite the improvement in the annual loss, Dewan Salman Fibre still faces substantial financial and operational challenges that will need to be addressed.

AGM Scheduled for October 28

The company has announced that its Annual General Meeting will be held on October 28, 2026, in Islamabad. The share transfer books will remain closed from October 21 to October 28, 2026, both days inclusive. 283685

Overall, Dewan Salman Fibre’s FY2026 results show a mixed picture. The sharp reduction in annual losses and finance costs represents a meaningful improvement compared with FY2025. However, the company’s negative equity, substantial accumulated losses, weak cash position and the auditors’ going-concern concerns remain significant issues.

For investors and market observers, the key question will be whether the company can translate the reduction in losses into a sustainable recovery in operations and strengthen its financial position in the coming periods.