Siemens Engineering quarterly earnings tumble

January 29, 2026 (MLN): Siemens (Pakistan) Engineering Limited (PSX:SIEM) reported a net profit of Rs59.9m for the quarter ended December 31, 2025, which represents a sharp 94% decline from the Rs1.01 billion profit recorded in the same period last year.

The company's earnings per share plummeted to Rs7.27 from Rs122.06 in the corresponding quarter of the previous year.

The engineering firm's net sales and services increased 18.5% YoY to Rs1.89bn from Rs1.59bn, indicating healthy top-line growth.

However, the cost of sales and services surged 69.1% to Rs1.65bn from Rs973.1m, significantly eroding margins.

Consequently, gross profit declined 60.8% to Rs242.8m compared to Rs620.1m in the same quarter last year, which reflected severe margin compression during the period.

Operating performance deteriorated substantially as the company swung to an operating loss of Rs75.1m compared to an operating profit of Rs395.3m in SPLY.

Marketing and selling expenses rose 25.8% to Rs275.8m from Rs219.2m, while general administrative expenses jumped to Rs52.4m from Rs17.6m.

The company's financial performance was bolstered by a remarkable surge in net financial income, which jumped to Rs134.2m from Rs11.1m YoY.

Financial income soared to Rs148.6m from Rs15.1m, while financial expenses increased to Rs14.4m from Rs4m.

 This strong financial income partially offset the operational challenges, resulting in a profit before levy and income tax from continuing operations of Rs59.1m, down 85.5% from Rs406.4m.

The company recorded a levy of Rs42.5m, up 34.8% from Rs31.5m in the corresponding period. Profit before income tax from continuing operations stood at Rs16.6m, down 95.6% from Rs374.8m in SPLY.

The company reported an income tax credit of Rs43.4m compared to an income tax expense of Rs56.5m in the prior year period, which helped support the bottom line.

Net profit for the period from continuing operations reached Rs59.9m, down 81.2% from Rs318.3m, while discontinued operations contributed zero profit compared to Rs688.3m in the year-ago period.

Siemens Pakistan Engineering operates in the engineering, procurement, and construction sector, providing solutions across various industries including energy, infrastructure, and industrial automation.

The sharp decline in profitability appears to be driven by a combination of margin compression due to rising costs, increased administrative expenses, and the absence of profits from discontinued operations that had significantly boosted results in the prior year.

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