NRL returns to profitability in Q1FY26

October 28, 2025 (MLN): National Refinery Limited (PSX: NRL) reported a profit after taxation of Rs1.03bn for the quarter ended September 30, 2025, a sharp reversal from a loss of Rs7.24bn in the corresponding quarter last year.

Earning per share stood at Rs12.82 compared to a loss per share of Rs90.5 in Q1FY25.

Revenue from contracts with customers rose 29.1% year-on-year to Rs111.87bn from Rs86.68bn, demonstrating strong demand during the quarter. Trade discounts, taxes, duties, levies and price differentials increased 63.9% to Rs32.3bn from Rs19.71bn.

Net revenue from contracts with customers grew 18.8% to Rs79.57bn from Rs66.98bn in Q1FY25. Cost of sales increased 3% to Rs75.46bn from Rs73.27bn.

Gross profit/(loss) turned positive at Rs4.11bn against a loss of Rs6.3bn in SPLY, with the gross margin improving dramatically to 5.2% from -9.4% in the prior year quarter, indicating a significant operational turnaround.

Distribution costs declined 35% to Rs136.2  m from Rs209.7  m, while administrative expenses rose 18.6% to Rs331.4m. Other income declined 14.3% to Rs90.7m from Rs105.8m last year.

Other operating expenses surged 7.6 times to Rs94.9 m from Rs11m in Q1FY25.

The company recorded an operating profit/(loss) of Rs3.64bn, compared to an operating loss of Rs6.58bn in Q1FY25.

Finance cost (net) decreased 38.6% to Rs1.77bn from Rs2.89bn in the previous year, providing substantial relief to the bottom line.

Profit/(loss) before taxation and levies stood at Rs1.87bn compared to a loss of Rs9.58bn in Q1FY25. Levies declined 42.7% to Rs54.3m from Rs94.9m.

Profit/(loss) before income tax turned positive at Rs1.81bn compared to a loss of Rs9.67bn in Q1FY25.

Taxation reflected a charge of Rs789.1 m in Q1FY26, compared to a reversal of Rs2.44bn in the prior period.

The company concluded Q1FY26 with a net profit of Rs1.03bn, delivering a net profit margin of 1.3% compared to -10.8% in Q1FY25. The exceptional turnaround was driven by strong revenue growth, dramatic gross margin improvement reflecting better refining economics, and substantially lower finance costs, marking a return to profitability after significant losses in the prior year.

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