Mitchell’s Fruit Farms Limited Posts Rs177.78 Million Quarterly Loss as Expenses Surge

Mitchell’s Fruit Farms Limited has reported a net loss of Rs177.78 million for the quarter ended September 30, 2026, compared with a net profit of Rs183.72 million in the same period last year, reflecting a significant deterioration in the company’s financial performance.

According to the company’s unaudited financial statements, revenue increased to Rs951.60 million during the quarter, up from Rs702.16 million in the corresponding period of the previous year. Despite the growth in sales, the company faced a sharp increase in its cost of sales and operating expenses, which pushed its profitability into negative territory.

Gross Profit Increases but Operating Costs Weigh on Performance

The company’s cost of sales rose to Rs713.27 million from Rs523.78 million a year earlier. Consequently, gross profit increased to Rs238.34 million from Rs178.37 million, reflecting higher revenue but also greater production costs.

However, the improvement in gross profit was outweighed by a substantial rise in operating expenses. Administrative expenses increased to Rs102.95 million from Rs55.98 million, while selling and distribution expenses climbed to Rs285.46 million from Rs92.90 million.

As a result, Mitchell’s Fruit Farms recorded an operating loss of Rs150.07 million, compared with an operating profit of Rs29.50 million in the corresponding period last year.

Net Loss Replaces Previous Year’s Profit

The company’s financial performance weakened further after accounting for other operating expenses and finance costs. Finance costs increased to Rs20.57 million from Rs17.06 million, while other operating expenses stood at Rs3.03 million.

Although the company reported other income of Rs7.85 million, it was insufficient to offset the overall expenses. The loss before levy and taxation reached Rs165.82 million, compared with a profit of Rs192.55 million in the same period last year.

After accounting for levy and final taxation of Rs11.96 million, the company posted a net loss of Rs177.78 million. Earnings per share also turned negative at Rs6.93, compared with positive earnings of Rs7.16 in the previous year.

Assets and Liabilities Increase

The company’s balance sheet showed total assets of Rs2.89 billion as of September 30, 2026, compared with Rs2.51 billion at June 30, 2026.

Current assets increased to Rs2.02 billion from Rs1.84 billion, while non-current assets rose to Rs867.24 million from Rs671.81 million. Stock in trade increased to Rs917.44 million from Rs770.36 million, and trade debts reached Rs440.83 million compared with Rs393.26 million at the end of June.

However, total current liabilities also increased significantly, reaching Rs1.59 billion from Rs1.20 billion. Trade and other payables rose to Rs1.05 billion, while short-term borrowings increased to Rs482.04 million.

Shareholders’ equity declined to Rs925.39 million from Rs1.10 billion at June 30, 2026, reflecting the impact of the quarterly loss on the company’s accumulated reserves.

Cash Flow Remains Under Pressure

The cash flow statement showed that net cash used in operating activities amounted to Rs49.20 million during the quarter, compared with Rs25.22 million in the corresponding period last year.

The company also reported net cash used in investing activities of Rs25.01 million, including payments for property, plant and equipment. Meanwhile, financing activities generated net cash of Rs48.19 million, supported by financing arrangements and partly offset by repayments.

Despite the positive contribution from financing activities, cash and cash equivalents declined by Rs26.01 million during the quarter, leaving the company with Rs257.59 million at September 30, 2026, compared with Rs283.60 million at June 30, 2026.

Outlook

Mitchell’s Fruit Farms Limited’s first-quarter results highlight the pressure that rising operating expenses and financing costs can place on profitability, even when revenue and gross profit are increasing.

The company’s ability to control selling, distribution and administrative expenses, manage working capital and improve operating efficiency will be important in determining whether it can return to profitability in the coming quarters.

Investors will be watching future financial results for signs of improved cost management, stronger operating performance and a recovery in earnings.