Zephyr Textiles Reports Improved Profitability in FY2026
Zephyr Textiles Limited reported a significant improvement in its bottom-line performance for the financial year ended June 30, 2026, despite a decline in annual sales. The company’s financial results were approved by its Board of Directors at a meeting held on September 30, 2026. The company also announced that no cash dividend, bonus shares or right shares would be issued for the year.
According to the financial statements, Zephyr Textiles recorded net sales of approximately Rs7.75 billion during FY2026, compared with Rs8.28 billion in the previous year. Despite the lower sales, gross profit increased to Rs867.5 million, from Rs815.2 million a year earlier.
The improvement in gross profit, however, was partly offset by higher operating expenses. Distribution expenses rose to Rs451.1 million from Rs401.8 million, while administrative expenses increased to Rs136.9 million from Rs122.9 million. As a result, operating profit declined to approximately Rs303.8 million, compared with Rs341.6 million in FY2025.
Finance costs also remained a significant expense, standing at around Rs183.0 million during the year. Nevertheless, profit before taxation and levy increased to Rs120.8 million from Rs80.3 million in the preceding year. After taxation, the company reported a profit of Rs6.74 million, substantially higher than the Rs1.82 million recorded in FY2025.
The improvement was also reflected in earnings per share. Basic and diluted EPS increased to Rs0.11, compared with Rs0.03 in the previous financial year.
Zephyr Textiles’ total assets stood at approximately Rs7.18 billion at June 30, 2026, compared with Rs6.77 billion a year earlier. Total equity was reported at around Rs2.54 billion, while total liabilities amounted to approximately Rs4.64 billion.
The company’s comprehensive income also showed an improvement. Total comprehensive income for FY2026 stood at approximately Rs8.44 million, compared with a comprehensive loss of Rs83.69 million in FY2025. The improvement included a gain on remeasurement of staff retirement benefits, partly offset by related deferred tax.
Cash-flow performance also improved considerably. Zephyr Textiles generated Rs90.2 million in net cash from operating activities during FY2026, compared with a net operating cash outflow of Rs332.9 million in FY2025. However, investing activities consumed approximately Rs267.7 million, largely reflecting capital expenditure, while financing activities generated about Rs182.8 million.
The statement of changes in equity showed accumulated profit increasing to approximately Rs1.55 billion at June 30, 2026, from Rs1.52 billion a year earlier. Total equity and reserves stood at approximately Rs2.54 billion at the close of the financial year.
Overall, Zephyr Textiles entered FY2027 with a stronger bottom-line position, supported by improved gross profitability, higher profit after tax and a substantial recovery in operating cash generation. At the same time, the decline in sales and increase in operating expenses remain important factors in assessing the company’s financial performance going forward.
