Clover Pakistan's 1QFY26 profit plunges 67%

October 30, 2025 (MLN):  Clover Pakistan Limited (PSX: CLOV) reported a profit after tax of Rs29.15m for the quarter ended September 30, 2025, down 67% from Rs87.69m in the corresponding quarter last year.

Earnings per share declined 67% to Rs0.75 compared to Rs2.25 in 1QFY25.

Net revenue surged 69% year-on-year to Rs1.39bn from Rs825.4m, demonstrating strong top-line growth during the quarter. Cost of sales increased 85% to Rs1.34bn from Rs723.3m.

Gross profit contracted 49% to Rs52.46m against Rs102.19m in 1QFY25, with the gross margin declining sharply to 3.8% from 12.4% in the prior year quarter, indicating severe margin compression as cost increases significantly outpaced revenue growth.

Admin, selling and distribution expenses increased 3.5 times to Rs18.92m from Rs4.18m last year.

The company recorded an operating profit of Rs33.54m, down 66% from Rs98m in 1QFY25.

Other operating expenses stood at Rs2.32m in 1QFY26, which were absent in the prior quarter. Finance cost stood at Rs68 thousand in 1QFY26.

Profit before taxation and levies stood at Rs31.29m, down 68% from Rs98m in 1QFY25. Levies increased 69% to Rs17.39m from Rs10.32m.

Profit before taxation decreased 84% to Rs13.9m from Rs87.69m in 1QFY25.

Taxation stood at Rs15.25m in 1QFY26, which was absent in the prior period, adding a significant charge to profitability.

The company concluded 1QFY26 with a net profit of Rs29.15m, delivering a net profit margin of 2.1% compared to 10.6% in 1QFY25.

The profit decline was driven by dramatic margin compression as cost of sales rose 85% against 69% revenue growth, substantially higher operating expenses, and the introduction of taxation charges, reflecting challenging operational conditions and pricing pressure in the dairy sector.

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