Searle strikes a high note

February 26, 2026 (MLN): The Searle Company Limited (PSX:SEARL) reported an explosive surge in net profit to Rs1.81bn for the half year ended December 31, 2025, a staggering 26.05 times higher than the Rs69.35m profit recorded in the same period last year.

The company's earnings per share (EPS) skyrocketed to Rs3.05 from a meager Rs0.06 in the corresponding period of the previous year.

This massive bottom-line expansion was driven by robust revenue growth, a sharp reduction in finance costs, and importantly, the absence of a massive loss from discontinued operations that severely dragged down last year's earnings.

The company's top-line revenue from contracts with customers grew by a strong 31% year-on-year to Rs19.65bn from Rs14.99bn.

Meanwhile, the cost of sales increased at a much slower pace of 14%, reaching Rs8.91bn compared to Rs7.80bn.

Because revenue outpaced direct costs, gross profit surged 49% to Rs10.75bn from Rs7.19bn in the prior period.

Consequently, the gross profit margin witnessed a massive improvement, expanding to 54.7% from 48% in H1 FY2025, indicating excellent pricing power and cost efficiency.

On the operating side, distribution costs increased 41% to Rs5.61bn from Rs3.97bn, reflecting heightened marketing and selling activities to drive the top-line growth.

 Administrative expenses rose 14% to Rs1.02bn from Rs897.56m.

Other operating expenses jumped significantly by 11.6 times to Rs325.86m from Rs28.10m. However, this was somewhat cushioned by other income, which grew 3.64 times to Rs294.68m from Rs81.02m.

Despite the higher operating overheads, the sheer strength of the gross margins pushed profit from operations up 72% to Rs4.08bn from Rs2.37bn.

Below the operating line, the company found major relief as finance costs plummeted 61% to Rs541.48m from Rs1.40bn, freeing up substantial cash flow for the bottom line.

Profit before income tax reached Rs3.54bn, a 3.77 times increase from Rs940.87m in the prior period.

The company booked a heavy taxation expense of Rs1.74bn, which was 9.86 times higher than the Rs176.12m tax charge in the corresponding period last year. This brought the profit from continuing operations to Rs1.81bn.

Crucially, in the same period last year, the company suffered a net loss of Rs695.40m from discontinued operations, which virtually wiped out its earnings. With no such discontinued operations dragging down the current period, the final net profit for the period remained at Rs1.81bn, securing the incredible 26-fold growth.

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