KARACHI: Service Global Footwear Limited (PSX: SGFL) reported a sharp decline in profitability for the first quarter ended March 31, 2026, despite posting strong growth in sales, as higher taxes, levies, and other expenses weighed heavily on earnings.
According to the company’s financial results, net sales increased by nearly 20% to Rs4.79 billion, compared with Rs4.00 billion in the corresponding quarter of last year. Higher sales also lifted gross profit slightly to Rs724.9 million, up from Rs721.2 million a year earlier.
However, the company’s bottom line came under significant pressure. Profit after taxation plunged to Rs96.9 million, down nearly 81% from Rs515.7 million recorded in the same period last year. Consequently, earnings per share (EPS) declined sharply to Rs0.47, compared with Rs2.50 in the first quarter of 2025.
Operating profit also weakened during the quarter. While distribution expenses fell, the company reported a substantial increase in other expenses, which jumped to Rs72.3 million from Rs4.8 million a year earlier. Finance costs also remained significant, although they declined to Rs94.1 million from Rs150.1 million in the corresponding period.
The results were further impacted by a higher share of profit from an associate alongside increased taxation and levy charges, resulting in a much lower net profit compared to last year’s exceptionally strong performance.
On the financial position front, the company’s total assets stood at Rs20.68 billion as of March 31, 2026, while total equity amounted to Rs8.39 billion. Cash and bank balances improved to over Rs1.12 billion, reflecting a stronger liquidity position at the end of the reporting period.
The Board of Directors, in its meeting held on April 28, 2026, approved the first-quarter financial statements. The board did not recommend any cash dividend, bonus shares, or right shares for the period.
