Mughal Energy Returns to Profit in FY2026 Despite Higher Financial Costs

Mughal Energy Limited has returned to profitability for the financial year ended June 30, 2026, reporting a profit after tax of Rs9.13 million, compared with a loss of Rs21.28 million recorded in the previous financial year.

The company disclosed its audited financial results to the Pakistan Stock Exchange on September 11, 2026. The Board of Directors approved the financial statements at its meeting held the same day in Lahore.

Profitability Turns Positive

According to the company’s statement of profit or loss, Mughal Energy recorded Rs9.13 million in profit before and after taxation during FY2026, compared with a loss of Rs21.28 million in FY2025. Earnings per share also improved to Rs0.05, against a loss per share of Rs0.11 a year earlier.

The company’s results show that other income played an important role in the year, rising sharply to Rs80.58 million from Rs8.11 million in FY2025. At the same time, administrative expenses increased to Rs50.29 million from Rs25.82 million, while finance costs rose considerably to Rs20.32 million from Rs2.77 million.

Notably, the company reported no revenue or cost of revenue in the statement for either year. As a result, the reported annual profit was largely shaped by other income alongside the company’s administrative and financing expenses.

Asset Base Expands

Mughal Energy’s financial position also expanded substantially during the year. Total assets reached Rs12.02 billion as of June 30, 2026, compared with Rs7.24 billion a year earlier.

Property, plant and equipment increased to Rs9.23 billion from Rs6.47 billion, while current assets climbed to Rs2.78 billion from Rs773.35 million. Inventories stood at Rs1.30 billion at the end of FY2026, while amounts due from the government increased to Rs1.26 billion. Cash and bank balances also improved to Rs105.41 million from Rs14.76 million.

The expansion in assets was accompanied by higher liabilities. Total liabilities rose to Rs7.97 billion, compared with Rs3.80 billion in FY2025. Long-term financing stood at Rs3.91 billion, while short-term loans from directors and their relatives reached Rs3.13 billion.

Cash Flow Remains a Key Focus

Despite the return to accounting profit, the company’s cash-flow statement shows significant cash requirements during FY2026.

Mughal Energy used Rs1.89 billion in operating activities during the year, largely reflecting increases in inventories, deposits and other receivables, and amounts due from the government. It also spent Rs2.03 billion on the acquisition of property, plant and equipment.

These outflows were supported by financing activities. The company generated Rs3.67 billion from financing activities, including proceeds from long-term financing and net funding from directors and their relatives. Cash and cash equivalents increased to approximately Rs103.50 million at year-end, compared with Rs14.76 million at the beginning of the year.

No Dividend Declared

Despite the return to profitability, the Board recommended no cash dividend, bonus shares or right shares for FY2026.

The company has scheduled its Annual General Meeting for October 22, 2026, at 11:45 a.m. at Avari Hotel Lahore. Its share transfer books will remain closed from October 13 through October 22, 2026, inclusive.

Outlook

Mughal Energy’s FY2026 results mark a notable shift from the loss recorded a year earlier. The improvement in profitability, expansion in the asset base and higher cash balance provide important developments for shareholders to consider. However, the substantial operating and investment cash outflows, alongside increased financing obligations, remain important factors in assessing the company’s financial position.

Overall, FY2026 represents a return to profitability for Mughal Energy, with the company reporting Rs9.13 million in annual earnings after posting a Rs21.28 million loss in FY2025.