Pak Leather Crafts Limited has reported a significant improvement in its sales performance during the first quarter ended September 30, 2026, although the company continued to face financial challenges and remained in loss.

According to the company’s unaudited financial results submitted to the Pakistan Stock Exchange, sales increased to Rs11.05 million during the quarter, compared with Rs6.55 million in the corresponding period last year, representing an increase of approximately 69%.

The company’s cost of sales also increased to Rs8.36 million from Rs4.77 million. Consequently, gross profit improved to Rs2.69 million, compared with Rs1.77 million in the same quarter of the previous year.

Pak Leather Crafts also recorded other income of Rs951,000 during the reporting period, which further supported its overall financial performance.

Despite higher sales and improved gross profit, the company’s operating expenses remained a major challenge. Administrative expenses increased to Rs3.94 million from Rs3.59 million, while selling and distribution expenses declined to Rs246,000 from Rs373,000.

Finance costs also increased to Rs187,000 compared with Rs108,000 in the corresponding quarter last year.

As a result, the company reported an operating loss of Rs729,000 before taxation, improving from an operating loss of Rs2.30 million in the same period last year. Its net loss narrowed to Rs839,000 against Rs2.36 million previously.

The loss per share also improved to Rs0.25 from Rs0.69, indicating a reduction in the company’s quarterly losses.

Financial Position and Cash Flow

The company’s balance sheet showed total assets of Rs68.88 million as of September 30, 2026, compared with Rs67.03 million at the end of June 2026.

However, its financial position continued to reflect accumulated losses of Rs359.53 million. Current liabilities stood at Rs277.03 million, highlighting the financial pressures facing the business.

Cash and bank balances declined to Rs544,000 from Rs1.14 million at the end of the previous financial year.

The cash flow statement also showed that net cash used in operating activities amounted to Rs1.58 million during the quarter, compared with positive operating cash flow of Rs1.27 million in the corresponding period last year.

Meanwhile, the company received Rs3.06 million in loans from directors, while net cash used in investing activities amounted to Rs2.07 million.

No Dividend Announced

In its October 29, 2026 board meeting, the company decided not to announce any cash dividend, bonus shares or right shares for the first quarter ended September 30, 2026.

Outlook

Pak Leather Crafts Limited’s latest financial results indicate an improvement in revenue generation and a substantial reduction in quarterly losses. The growth in sales and gross profit is a positive development, suggesting better business activity compared with the previous year.

However, continued operating losses, negative operating cash flow and a substantial accumulated loss remain important challenges.

The company’s future performance will depend on its ability to sustain sales growth, control administrative expenses, improve operating efficiency and strengthen cash flow. Investors will be watching upcoming financial results to determine whether the improvement recorded during the first quarter can translate into a more sustainable financial recovery.