Unity Foods returns to profitability with Rs96m profit

October 28, 2025 (MLN): Unity Foods Limited (PSX: UNITY) posted a net profit after levies and taxation of Rs95.97 million for the quarter ended September 30, 2025, marking a significant turnaround from a net loss of Rs141.15m in the corresponding quarter of the previous year.

The company's earnings per share stood at Rs0.08 compared to a loss per share of Rs0.12 in Q1FY25, showing improved operational performance during the period.

Gross turnover declined 28.54% year-on-year to Rs10.61bn from Rs14.85bn in Q1FY25, indicating softer topline performance. Sales tax and discounts decreased 34.36% to Rs1.26bn from Rs1.92bn.

Net turnover fell 27.67% to Rs9.35bn from Rs12.93bn in the same period last year.

Cost of sales declined 25.66% to Rs8.25bn from Rs11.1bn, demonstrating improved cost management despite lower revenues.

Gross profit decreased 39.87% to Rs1.1bn compared to Rs1.83bn in Q1FY25, with the gross margin compressing to 11.8% from 14.1% in the prior year quarter.

Selling and distribution expenses improved by 6.88% to Rs227.4m from Rs244.2m, while administrative expenses declined 8.64% to Rs184m from Rs201.4m, showing effective cost control measures.

Other operating expenses surged 72.19% to Rs17.36m from Rs10.08m. Total operating expenses decreased 5.91% to Rs428.76m from Rs455.68m in Q1FY25.

Other income jumped significantly by 229.40% to Rs818.72m from Rs248.55m last year, providing substantial support to the bottom line.

Operating profit declined 8.13% to Rs1.49bn from Rs1.62bn in the corresponding quarter.

Finance costs decreased 21.19% to Rs1.25bn from Rs1.59bn in Q1FY25, easing the pressure on profitability.

Profit before levies and taxation surged 716.09% to Rs234.29m compared to Rs28.71m in Q1FY25. Levies declined 18.57% to Rs138.32m from Rs169.85m.

Unity Foods concluded Q1FY26 with a net profit of Rs95.97m, representing a margin of 1.0% compared to -1.1% in Q1FY25.

The return to profitability was primarily driven by substantially higher other income, reduced finance costs, and effective expense management, which offset the impact of lower revenues and compressed gross margins.

The company's ability to control operating expenses while navigating a challenging revenue environment demonstrates resilient operational execution during the quarter.

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