Amreli Steels' 1QFY26 loss narrows 20%

October 30, 2025 (MLN):  Amreli Steels Limited (PSX: ASTL) reported a loss after tax of Rs790.4m for the quarter ended September 30, 2025, narrowing 20% from a loss of Rs991.7m in the corresponding quarter last year.

Loss per share declined 20% to Rs2.66 compared to Rs3.34 in 1QFY25.

Net sales declined 34% year-on-year to Rs2.79bn from Rs4.23bn, reflecting significantly weaker demand during the quarter. Cost of sales decreased 31% to Rs2.77bn from Rs4bn.

Gross profit contracted 92% to Rs18.6m against Rs228.8m in 1QFY25, with the gross margin declining sharply to 0.7% from 5.4% in the prior year quarter, indicating severe margin compression despite lower production costs.

Distribution costs declined 36% to Rs103.4m from Rs160.5m, while administrative expenses decreased 9% to Rs174.3m from Rs190.9m. Other expenses increased 50% to Rs27.6m from Rs18.4m last year. Other income increased 2.8 times to Rs70.5m from Rs25.4m in 1QFY25.

The company recorded an operating loss of Rs216.5m, widening 99% from a loss of Rs108.9m in 1QFY25.

Finance costs declined 28% to Rs873m from Rs1.21bn in the previous year, providing some relief to the bottom line.

Loss before taxation and levy stood at Rs1.09bn compared to a loss of Rs1.32bn in 1QFY25, narrowing by 18%. Levy decreased 38% to Rs34.6m from Rs55.5m.

Loss before taxation narrowed 18% to Rs1.12bn from Rs1.38bn in 1QFY25.

Taxation reflected a reversal of Rs333.7m in 1QFY26 compared to a reversal of Rs385.6m in the prior period, declining by 13%.

The company concluded 1QFY26 with a loss for the period of Rs790.4m.

While the loss narrowed by 20% compared to the prior year, this was primarily due to a 28% reduction in finance costs and the tax reversal, as the core operations deteriorated with a 92% collapse in gross profit and a widening operating loss, reflecting challenging market conditions and severe pricing pressure in the steel sector.

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