KARACHI: Mirpurkhas Sugar Mills Limited (PSX: MIRKS) reported a net loss of Rs188.36 million for the nine months ended June 30, 2026, compared with a loss of Rs28.57 million in the corresponding period last year, as declining sugar prices, higher input costs, and challenging market conditions weighed on profitability.
The company’s net sales declined to Rs8.78 billion, down from Rs9.58 billion a year earlier. Despite a reduction in the cost of sales, gross profit fell to Rs1.09 billion from Rs1.37 billion, reflecting margin pressure across its operations.
Mirpurkhas Sugar Mills recorded earnings per share (EPS) of negative Rs2.83, compared with negative Rs0.43 in the same period of the previous year. Finance costs remained elevated at Rs851.86 million, while the company also incurred levies and taxation that further impacted the bottom line. However, the share of profit from associate Unicol Limited improved significantly to Rs223.59 million, partially offsetting operational losses.
Sugar business faces pricing challenges
During the review period, the company’s sugar division increased production by 20.31% year-on-year, supported by improved cane quality and achieving the highest sucrose recovery in its history. However, sugar sales volumes declined by 3.08% to 43,715 metric tons due to subdued domestic demand and an industry-wide surplus.
Management noted that Pakistan’s sugar industry is carrying an estimated 1.3 million metric ton surplus, while the government’s decision to delay approval for sugar exports has continued to pressure domestic prices. Sugar prices reportedly declined by around 15%, whereas sugarcane procurement costs increased by more than 6%, significantly squeezing margins. As a result, the sugar division’s gross profit fell to Rs793.8 million from Rs1.18 billion a year earlier.
Paper and board segment remains under pressure
The paper and board division also faced a difficult operating environment. Paper production decreased to 29,409 metric tons, while sales volumes dropped to 28,253 metric tons. Although average selling prices increased marginally, higher costs for waste paper (OCC), fuel, and freight, coupled with increased competition, continued to pressure profitability.
The company said its newly commissioned agro-pulping plant is expected to strengthen raw material sourcing and improve operational flexibility going forward. Despite operational improvements that lifted the division’s gross profit to Rs291.8 million, high debt levels and extended receivable cycles continued to weigh on financial performance.
Outlook
Looking ahead, Mirpurkhas Sugar Mills expects Pakistan’s macroeconomic environment to remain broadly supportive but warned that geopolitical tensions, volatile commodity prices, and domestic policy changes could continue affecting costs and margins.
The company believes the sugar division will continue facing pressure from excess domestic supply, inventory build-up, and financing costs, while expected growth in sugarcane availability next season may further impact pricing. For the paper and board business, management expects performance to depend largely on raw material availability, fuel costs, and demand from key sectors such as textiles, pharmaceuticals, food packaging, and apparel. The company also plans to focus on operational efficiency and expanding export markets to diversify revenue streams.
