TOWL FY26 profit settles at Rs151m

September 28, 2026 (MLN): Towellers Limited (PSX: TOWL) reported a 47% drop in its net profit for the fiscal year ended June 30, 2026, recording Rs150.88m compared to Rs286.71m in the preceding year.

Reflecting this bottom-line compression, basic and diluted earnings per share (EPS) for the year fell to Rs8.88, down from Rs16.87 in FY25.

The primary factor weighing on final earnings was a tax expense reversal impact from the prior year alongside top-line sales compression.

Net sales declined by 10% year-on-year to Rs11.14bn, down from Rs12.35bn in FY25. However, cost of sales contracted by 14% to Rs9.67bn, enabling gross profit to expand 26% to Rs1.46bn compared to Rs1.16bn in the prior year.

On the operational front, overheads expanded to support administration and distribution operations.

Distribution costs rose 7% to Rs535.13m and administrative expenses grew 14% to Rs551.87m. Coupled with a 32% decline in "other income" (Rs89.75m), operating profit grew by 63% to Rs431.80m.

Below the operating line, TOWL absorbed higher debt-servicing outlays, with finance costs increasing 40% to Rs41.41m (up from Rs29.64m in FY25).

Despite this, pre-tax performance remained robust, with profit before taxation surging 164% to Rs332.07m (supported by a 47% reduction in statutory levies, which fell to Rs58.32m).

However, the final bottom-line suffered due to taxation dynamics. While FY25 benefited from a net tax credit of Rs160.83m, FY26 absorbed a net income tax expense of Rs181.19m.

This tax reversal offset core operational gross margin expansion, leading Towellers Limited to close the fiscal year with a net profit of Rs150.88m.

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