Avanceon Limited plunges to loss

October 28, 2025 (MLN): Avanceon Limited (PSX: AVN) has reported a significant downturn in its financial performance for the nine months ended September 30, 2025, recording a net loss compared to a substantial profit in the prior year.

The company posted a Loss for the period of Rs149.15 million, a stark reversal from the Rs336.96m profit recorded in the corresponding period of 2024.

This massive decline of over 144% was primarily driven by a sharp drop in revenues and mounting finance costs.

The poor result led to a negative Net Profit Margin of -2.01%, down from a positive 3.69% last year. The loss per share for equity holders widened to Rs (0.36) from a profit of Rs 0.75 (Restated).

The challenging period began with a sharp contraction in sales. Revenues fell by nearly 19.0% to Rs7.4 billion from Rs9.14bn last year, indicating weaker market demand or project execution delays.

The decrease in revenue was more pronounced than the reduction in the Cost of revenue (17.60% decrease), causing the Gross Profit Margin to contract by 1.22 percentage points to 26.75%.

Consequently, Gross Profit declined by 22.50% to Rs1.98bn.

Profit from operations plummeted by nearly 69% to Rs209.62m, underscoring the pressure exerted by the lower Gross Profit.

Administrative and selling expenses remained relatively flat at Rs1.81bn, showing the company's inability to sufficiently align fixed costs with the steep drop in revenue.

The only significant relief came from Other income, which more than tripled, increasing by 217.81% to Rs124.41m.

The company was hit hard by rising debt servicing costs, with Finance costs increasing by 21.03% to Rs350.72m.

The substantial increase in finance costs, coupled with the fall in operating profit, pushed the company into a Loss before tax of Rs141.11m, marking a negative shift of over 136% from last year's pre-tax profit of Rs383.87m.

The ultimate Loss for the period of Rs149.15m was primarily attributable to the Equity holders of the Holding Company, who absorbed a loss of Rs150.45m.

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