Karachi: Merit Packaging Limited has posted a return to profitability for the nine months ended March 31, 2026, driven largely by a substantial gain from the disposal of assets classified as held for sale, despite continued weakness in its core packaging business.
According to the company’s unaudited financial results approved by the Board of Directors on April 28, 2026, Merit Packaging reported a net profit of Rs80.55 million for the nine-month period, compared to a net loss of Rs169.55 million recorded during the corresponding period last year. Earnings per share (EPS) improved to Rs0.40, reversing a loss per share of Rs0.85 in the same period of FY2025.
The turnaround came despite a sharp decline in revenue. Sales for the nine months fell to Rs2.54 billion, down from Rs4.50 billion a year earlier. Gross profit also declined significantly to Rs80.42 million from Rs244.23 million, reflecting pressure on the company’s operating performance.
Merit’s core operations remained under strain, with the company reporting an operating loss of Rs109.31 million, compared to an operating profit of Rs28.42 million in the same period last year. However, a gain of Rs505.66 million from the disposal of assets classified as held for sale played a decisive role in lifting the company into profitability before tax.
For the third quarter alone, the company recorded a net loss of Rs48.90 million, an improvement over the Rs101.34 million loss reported in the corresponding quarter of FY2025. Quarterly revenue also declined to Rs760.72 million from Rs1.44 billion, highlighting continued demand and margin challenges.
On the financial position front, total assets stood at approximately Rs3.97 billion as of March 31, 2026, compared with Rs5.02 billion at the end of June 2025. Shareholders’ equity improved to Rs2.35 billion, while accumulated losses narrowed following the period’s profit.
The cash flow statement showed a mixed performance. Operating activities resulted in a cash outflow of Rs207.71 million, but investing activities generated a strong inflow of Rs977.71 million, primarily due to proceeds from the disposal of non-current assets held for sale. This helped the company report a net increase in cash and cash equivalents during the period.
While the asset sale has strengthened Merit Packaging’s financial position and enabled a return to profitability, investors will likely remain focused on the company’s ability to restore sustainable earnings from its core packaging operations amid declining sales and ongoing operational challenges.
