Gammon Pakistan Limited Narrows Annual Loss to Rs9.55 Million as Operating Cash Flow Turns Positive

Gammon Pakistan Limited has reported a significant improvement in its financial performance for the fiscal year ended June 30, 2026, reducing its consolidated after-tax loss to Rs9.55 million from Rs66.67 million in the previous financial year. However, the company’s revenue declined considerably, highlighting the challenges it continues to face in its business operations.

According to the company’s consolidated financial statements, revenue fell to Rs10.36 million in FY2026, compared with Rs93.15 million in FY2025. The decline in revenue was accompanied by a gross loss of Rs24.15 million, compared with a gross profit of Rs8.51 million in the previous year.

Despite the lower revenue, Gammon Pakistan managed to reduce its overall losses, supported by lower operating expenses and higher other income. General and administrative expenses decreased to Rs50.42 million from Rs73.34 million, while other operating expenses declined to Rs28.48 million from Rs38.80 million.

The company recorded other income of Rs70.25 million during FY2026, up from Rs50.91 million a year earlier. A fair value gain of Rs2.95 million on investment property also contributed to the financial results. Consequently, the loss before taxation narrowed to Rs29.98 million from Rs45.04 million in FY2025.

After accounting for taxation, the company posted a consolidated loss of Rs9.55 million, significantly lower than the previous year’s loss. The loss attributable to equity holders of the holding company stood at Rs1.28 million, while Rs8.28 million was attributable to non-controlling interests. Loss per share was reported at Rs0.05, compared with earnings per share of Rs1.03 in the previous financial year.

Financial Position and Assets

Gammon Pakistan’s total assets stood at Rs1.07 billion as of June 30, 2026, compared with Rs1.09 billion a year earlier. Non-current assets increased to Rs827.10 million from Rs769.46 million, reflecting growth in work in progress and other asset categories.

Work in progress rose to Rs66.16 million from Rs18.28 million, indicating a substantial increase in expenditure on projects under development. Investment property also increased slightly to Rs368.29 million from Rs365.34 million.

However, current assets declined to Rs247.09 million from Rs317.76 million. Cash and bank balances fell sharply to Rs5.23 million from Rs45.73 million, while contract receivables decreased to Rs13.86 million from Rs44.46 million.

The company’s total equity amounted to Rs843.91 million at the end of FY2026, compared with Rs845.80 million in the previous year. Current liabilities stood at Rs225.71 million, showing a slight decline from Rs227.17 million.

Improvement in Operating Cash Flow

One of the notable developments in the financial statements was the improvement in operating cash flow. Gammon Pakistan generated net cash of Rs10.98 million from operating activities during FY2026, compared with a net cash outflow of Rs41.04 million in FY2025.

Cash generated from operations reached Rs21.03 million, reversing the previous year’s outflow of Rs28.20 million. Changes in working capital, including reductions in stores, spares and contract receivables, along with an increase in trade and other payables, contributed to this improvement.

Nevertheless, investing activities consumed Rs51.48 million during the year, primarily due to expenditure on work in progress amounting to Rs48.21 million and purchases of fixed assets worth Rs3.41 million.

As a result, the company’s cash and cash equivalents declined by Rs40.50 million during the year, leaving a closing balance of Rs5.23 million on June 30, 2026.

Outlook

Gammon Pakistan Limited’s FY2026 results present a mixed financial picture. The substantial reduction in its annual loss and the return to positive operating cash flow are encouraging developments. Lower administrative and operating expenses also helped improve the bottom line.

However, the steep decline in revenue, the gross loss and the reduction in cash balances remain important concerns. The company’s future performance will depend on its ability to improve revenue generation, manage working capital effectively and convert ongoing project expenditure into sustainable business activity.

Investors and market participants will likely monitor the company’s upcoming financial results for evidence of stronger operating performance and improved liquidity.