Ghandhara Tyre and Rubber Company Limited (GTR) has reported a significant deterioration in its financial performance for the year ended June 30, 2026, with the company posting a net loss of Rs1.01 billion compared with a loss of Rs366.08 million in the previous year.
According to the company’s financial statements, sales declined to Rs16.85 billion during FY2026 from Rs17.80 billion a year earlier. At the same time, the cost of sales remained high at Rs15.34 billion, resulting in gross profit of Rs1.51 billion, down sharply from Rs2.27 billion in FY2025.
The pressure continued below the gross-profit line. Administrative expenses increased to Rs499.74 million from Rs432.85 million, while distribution costs stood at Rs762.16 million compared with Rs752.60 million in the preceding year. As a result, profit from operations fell to just Rs380.25 million from Rs1.18 billion.
Finance costs also remained a major burden. The company recorded finance costs of Rs1.15 billion during the year, compared with Rs1.35 billion in FY2025. Although the lower finance cost provided some relief, it was not enough to offset the sharp decline in operating profitability.
After accounting for its share of profit from an associated company, taxation and other charges, Ghandhara Tyre reported a loss before taxation of Rs947.01 million and ultimately a net loss of Rs1.01 billion. Loss per share increased considerably to Rs8.26 from Rs3.00 a year earlier.
Balance sheet remains sizeable
The company’s total assets stood at Rs19.16 billion as of June 30, 2026, down from Rs21.43 billion a year earlier. Non-current assets amounted to Rs8.31 billion, while current assets declined to Rs10.85 billion from Rs12.83 billion. Stocks fell to Rs5.70 billion from Rs6.66 billion, while trade debts declined to Rs2.72 billion from Rs3.67 billion.
On the liabilities side, total liabilities decreased to Rs13.36 billion from Rs14.69 billion. However, the company continued to carry substantial short-term financing, running finance and trade-related obligations.
Total equity declined to Rs5.80 billion from Rs6.74 billion, reflecting the impact of the annual loss. The company’s unappropriated profit stood at Rs822.59 million at the end of FY2026, compared with Rs758.65 million previously, while the surplus on revaluation of leasehold lands remained at Rs3.76 billion.
Operating cash flow improves
Despite the reported loss, Ghandhara Tyre showed a notable improvement in cash generation from operations. Net cash generated from operating activities reached Rs1.26 billion in FY2026, compared with an outflow of Rs1.34 billion in FY2025.
The company spent Rs80.48 million on property, plant and equipment during the year, while net cash used in investing activities stood at Rs40.51 million.
Financing activities, however, resulted in a net cash outflow of Rs969.13 million, largely reflecting repayments of long-term, diminishing musharaka and short-term financing. Cash and cash equivalents at the end of the year stood at negative Rs4.23 billion, compared with negative Rs4.48 billion in FY2025.
No dividend or bonus shares
The company has not recommended any cash dividend, bonus shares or right shares for the year ended June 30, 2026. The notice states that the 63rd Annual General Meeting is scheduled for October 28, 2026, in Karachi. Share transfer books will remain closed from October 21 to October 28, 2026.
Overall, Ghandhara Tyre’s FY2026 results highlight the difficult financial environment faced by the company. Lower sales and a steep decline in gross and operating profits pushed the company deeper into loss, even though operating cash generation improved significantly. The upcoming annual general meeting will provide shareholders with an opportunity to review the company’s financial position and performance in greater detail.
