CLOV 9MFY26 profit declines 7%

April 29, 2026 (MLN): Clover Pakistan Limited (PSX: CLOV) reported a 7% decline in its net profit for the nine months ended March 31, 2026, recording Rs196.50m compared to Rs212.27m in the corresponding period last year.

Reflecting this bottom-line contraction, the company's basic and diluted earnings per share (EPS) before sub-division dropped to Rs5.05 from Rs5.45 in 9MFY25.

The profit decline occurred despite a massive surge in top-line sales, primarily because soaring direct costs severely squeezed core margins.

CLOV’s net revenue posted an impressive 64% year-on-year increase, jumping to Rs4.31bn from Rs2.63bn.

However, the cost of sales skyrocketed at a much faster pace of 77%, reaching Rs4.01bn. Because these direct costs heavily outpaced revenue growth, the company’s gross profit contracted by 18%, falling to Rs305.96m from Rs373.75m in the prior year.

On the operational front, the company aggressively slashed its overheads to defend its bottom line. Administrative and selling expenses were reduced by a significant 37%, dropping to Rs75.34m from Rs118.87m.

Despite these commendable cost savings, the sheer drop in gross margins pushed the operating profit down by 10% to Rs230.62m.

Below the operating line, CLOV saw mixed dynamics. Other operating expenses fell by 26% to Rs11.90m, and other income saw a nominal but high-percentage increase to Rs107,000.

Conversely, finance costs, while small in absolute terms, spiked  to Rs1.03m from just Rs249,000 last year.

Weighed down by the shrinking gross margins, the profit before taxation and levy dropped 9% to Rs217.79m. After accounting for a 7% higher statutory levy of Rs43.60m, the profit before taxation settled at Rs174.19m (a 12% decline).

The company found its ultimate saving grace in a positive taxation credit of Rs22.31m, which was 57% higher than the Rs14.17m tax credit received in the same period last year.

This favorable tax reversal significantly cushioned the core operational hit, allowing Clover Pakistan to contain its final net profit decline to 7%, closing the nine-month period at Rs196.50m.

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