Ibrahim Fibres Reports Rs903 Million Loss in First Half of 2026

Ibrahim Fibres Limited reported a challenging financial performance for the half year ended June 30, 2026, posting a loss after levy and tax of Rs903 million, compared with a profit of Rs1.44 billion in the same period last year. The company attributed the reversal primarily to the recognition of a liability related to the settlement of the Sindh Infrastructure Development Cess (SIDC).

Despite the bottom-line loss, the company managed to slightly increase its sales. Net sales reached Rs53.82 billion, up from Rs53.33 billion during the corresponding period of 2025. However, gross profit declined to Rs4.30 billion from Rs5.02 billion, reflecting pressure on margins.

Production Remains Under Pressure

Ibrahim Fibres’ operating performance reflected the difficult conditions facing Pakistan’s textile and upstream manufacturing sectors.

During the six-month period, the company’s polyester plant produced 112,706 tons of Polyester Staple Fibre (PSF), compared with 122,057 tons a year earlier. PSF consumption by the company’s textile plants also declined to 9,823 tons from 12,182 tons.

Meanwhile, blended yarn production fell to 17,967 tons, compared with 19,757 tons in the same period of 2025.

SIDC Settlement Hits Bottom Line

The major factor behind the reported loss was the company’s settlement of its long-running dispute concerning the Sindh Infrastructure Development Cess.

Under the settlement agreement with the Government of Sindh, Ibrahim Fibres agreed to a settlement amount of Rs3.75 billion. After an initial payment of Rs562.5 million, the remaining liability was measured at its present value, resulting in a net obligation of approximately Rs1.99 billion, of which Rs1.44 billion was classified as non-current.

The company said it opted for the settlement framework introduced through the Sindh Development and Maintenance of Infrastructure Cess (Amendment) Act, 2026. As part of the agreement, it withdrew pending litigation and waived related claims against the Government of Sindh.

Rising Costs Add to Pressure

The financial statements also show continued pressure from production and financing costs. Cost of goods sold increased to Rs49.52 billion during the half year, compared with Rs48.31 billion a year earlier.

Raw material consumption stood at Rs36.33 billion, while fuel and power costs reached Rs6.06 billion, up from Rs5.89 billion in the corresponding period. Depreciation also increased to Rs1.79 billion from Rs1.60 billion.

The company’s finance cost increased to Rs739 million, compared with Rs554 million a year earlier, adding further pressure to profitability.

Textile Industry Faces Tough Environment

Management highlighted several challenges affecting the broader industry, including the economic impact of heightened conflict in the Middle East, sharp movements in global energy prices, textile product dumping, elevated domestic energy costs and renewed inflationary pressures.

According to the directors, these factors have particularly affected the upstream textile sector. The company expects domestic textile value chains to remain under pressure, while uncertainty in the Middle East could continue contributing to volatility in global energy markets.

Loss Per Share Turns Negative

The deterioration in earnings was also reflected in the company’s per-share performance. Loss per share stood at Rs2.91 for the half year ended June 30, 2026, compared with earnings per share of Rs4.64 in the same period of 2025.

Despite the difficult operating environment, management said it is continuing efforts to increase market share through marketing initiatives, improve operating performance and maintain prudent financial controls.

Overall, Ibrahim Fibres’ first-half results highlight the combined impact of weaker production volumes, rising operating and financing costs, and the significant accounting impact of the SIDC settlement. While sales remained relatively stable, the company faces a challenging road ahead as it navigates pressure across Pakistan’s textile industry and broader economic uncertainty.