ASTL rides back into profit territory

April 29, 2026 (MLN):  Amreli Steels Limited (PSX: ASTL) reported a spectacular financial turnaround for the nine months ended March 31, 2026, swinging from a massive net loss of Rs2.86bn in the previous year to a robust net profit of Rs868.16m.

Reflecting this dramatic recovery, the company's basic and diluted earnings per share (EPS) turned positive, recording Rs2.72 compared to a loss per share of Rs9.62 in 9MFY25.

However, the multi-fold profit growth masked ongoing weaknesses in the company's core operations.

ASTL’s top-line sales remained virtually flat, edging up by just 1% year-on-year to Rs13.04bn from Rs12.91bn.

The cost of sales increased at a slightly faster pace of 1.4% to Rs12.75bn.

This resulted in further margin compression, causing the gross profit to shrink by 13% to Rs294.12m, down from Rs339.88m last year.

On the operational front, the company remained in the red, although the deficit narrowed.

Administrative expenses rose by 4% to Rs597.05m, and the company booked a Rs62.94m provision for expected credit losses (a reversal from a Rs78.18m credit last year).

However, other expenses were slashed by 53% to Rs146.52m, and "other income" witnessed a massive surge to Rs667.37m.

Aided heavily by this secondary income, the company managed to narrow its operating loss by 62%, bringing it down to Rs300.21m from Rs791.88m in 9MFY25.

Below the operating line, finance costs remained a heavy burden at Rs2.38bn, despite dropping by 24% year-on-year.

Standing alone, the operating losses and massive debt servicing would have plunged the company deep into a Rs2.68bn deficit.

The absolute catalyst that rescued ASTL's financials was a massive, one-off "Gain on restructuring of loans" amounting to Rs3.07bn.

This single extraordinary item instantly catapulted the company out of the red, resulting in a profit before levy and taxation of Rs390.52m.

After accounting for a flat statutory levy of Rs162.75m, the profit before taxation stood at Rs227.78m.

Finally, a significant tax credit/reversal of Rs640.39m further amplified the bottom line, allowing Amreli Steels to securely close the nine-month period with a final net profit of Rs868.16m.

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