BFAGRO 9MFY26 profit dips 6%

April 30, 2026 (MLN): Barkat Frisian Agro Limited (PSX: BFAGRO) reported a 6% decline in its net profit for the nine months ended March 31, 2026, recording Rs474.57m compared to Rs505.24m in the corresponding period last year.

Notably, while the absolute net profit only saw a single-digit decline, the company's basic and diluted earnings per share (EPS) plummeted by 55%, falling to Rs1.53 from Rs3.41 in 9MFY25.

This stark divergence between profit decline and EPS contraction indicates a massive dilution, likely driven by a significant increase in the number of outstanding shares during the period.

The core profitability was pressured by rising costs that outpaced revenue growth. BFAGRO’s net sales posted a modest 6% year-on-year increase, rising to Rs5.94bn from Rs5.61bn. However, the cost of sales grew at a slightly faster rate of 7%, reaching Rs5.24bn. Consequently, the gross profit remained virtually flat, inching up by just 0.5% to settle at Rs703.80m.

On the operational front, the company faced mounting overheads. Selling and distribution expenses rose by 15% to Rs140.64m, while administrative expenses saw a sharp 28% increase to Rs67.87m.

A bright spot in operations was a massive  surge in exchange gains, which reached Rs10.29m. However, this was completely overshadowed by a 51% plunge in "other income," which halved to Rs50.69m from Rs103.38m last year. Dragged down by the stagnant gross margins, rising overheads, and plunging secondary income, the operating profit declined by 13% to Rs514.65m.

Below the operating line, BFAGRO found substantial relief in its debt servicing. The company successfully slashed its finance costs by a massive 55%, dropping them to Rs36.88m from an Rs82.24m burden in the same period last year.

This significant reduction in financial charges provided a major cushion, limiting the decline in profit before income tax to just 6%, settling at Rs477.77m.

After accounting for a higher income tax expense of Rs3.20m (up from Rs1.21m), the company closed the nine-month period with its final net profit contained to a 6% drop, standing at Rs474.57m.

The Company continues to prioritize the enhancement of its vertically integrated business model by investing in capacity expansion, optimizing its supply chain, and developing new markets.

The commissioning of the Faisalabad facility, along with steady progress on the egg powder plant and backward integration efforts, is expected to improve production efficiency and contribute to more stable margins over the medium to long term. In addition, the formation of a UAE subsidiary is projected to support sustained growth in export revenues and strengthen the Company’s footprint in global markets.

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