Nishat Mills Limited (PSX: NML) – 1QFY26 ( Summary of Directors' Report)
Nishat Mills posted modest revenue growth with stable margins but lower profit due to higher taxes and reduced dividend income. Despite global textile headwinds, the Company is investing in efficiency, diversification, and renewable energy to strengthen future performance.
Financial Performance:
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Revenue rose 3.6% to Rs. 45.0 billion (vs. Rs. 43.4 billion last year), driven by higher sales volumes.
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Gross profit improved 4.3% to Rs. 5.0 billion, with margins stable at 11.0%.
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Finance costs dropped sharply by Rs. 980 million to Rs. 1.73 billion, reflecting lower borrowings and interest rates.
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Dividend income declined by Rs. 571 million, impacting bottom-line performance.
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Profit after tax fell 18% to Rs. 772 million, mainly due to higher taxation.
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EPS stood at Rs. 2.20 (vs. Rs. 2.68 last year).
Market & Operating Environment:
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Global textile demand remained subdued amid trade tensions, new U.S. tariffs, and cautious buying by international customers.
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Domestic conditions showed improvement with declining inflation and interest rates, offering some relief to exporters.
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Persistent challenges include high taxes, volatile fuel prices, expensive energy, and competitive pressure from regional peers (India, Bangladesh, Vietnam).
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Climate disruptions—notably floods and erratic weather—hurt local cotton production, increasing reliance on costlier imports.
Strategic Initiatives:
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Spinning Division: Investing in open-end yarn (PC OE) production to enhance competitiveness.
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Weaving Division: Upgrading 47 high-speed, energy-efficient looms to improve productivity and cost efficiency.
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Energy Projects: Expanding solar power and battery storage across units to reduce conventional energy dependence.
See Report: https://financials.psx.com.pk/lib/DownloadPDF.php?id=264477
