Ansari Sugar Mills Limited (ANSM) has reported its financial results for the year ended September 30, 2025, revealing a significantly widened net loss despite a robust increase in revenue. The company posted a net loss of PKR 1.44 billion, a substantial increase from the PKR 859 million loss recorded in the previous year. This deterioration in profitability was primarily driven by an unprecedented tax expense, overshadowing strong sales growth and improved operating cash flow.
Financial Performance Overview
ANSM demonstrated impressive top-line growth, with net sales surging by approximately 133% to PKR 1.67 billion in 2025, up from PKR 717 million in 2024. This robust revenue performance translated into a higher gross profit of PKR 281 million, compared to PKR 213 million last year, indicating healthy core business activity.
However, this positive momentum was quickly eroded by escalating operating expenses. Selling and distribution expenses soared by over 539% from PKR 9.9 million to PKR 63.2 million, while administrative expenses also increased by 34% from PKR 72.9 million to PKR 97.7 million. Consequently, despite higher gross profit, operating profit actually declined by 7.7% to PKR 120 million from PKR 130 million in the prior year, highlighting pressure on operational efficiency.
A notable positive was the significant reduction in finance costs, which decreased by nearly 37% from PKR 1.06 billion in 2024 to PKR 668 million in 2025. This helped narrow the loss before taxation by 40% to PKR 559 million, a considerable improvement from the PKR 931 million loss reported previously. However, this positive trajectory was dramatically reversed by a massive taxation expense of PKR 884 million in 2025. This stands in stark contrast to the tax income of PKR 72 million in 2024 and was the overwhelming factor causing the net loss to widen to PKR 1.44 billion. This translates to a loss per share of PKR 25.72, significantly higher than PKR 15.30 last year.
On the balance sheet, total assets saw a slight increase of 0.9% to PKR 14.63 billion. However, accumulated losses led to a significant erosion of shareholder equity, which decreased by over 35% from PKR 4.12 billion to PKR 2.67 billion. Total liabilities also increased by over 15%, primarily driven by a rise in non-current financial liabilities and accrued mark-up.
Despite the net loss, the cash flow statement presented a more encouraging picture. Net cash generated from operating activities saw a substantial improvement, rising by over 714% to PKR 266.5 million in 2025 from just PKR 32.7 million in 2024. This indicates better operational efficiency in generating cash, even as accounting profits remain elusive. The company also increased its capital expenditure, with additions to fixed assets totaling PKR 241 million, up from PKR 48 million in the previous year, signaling investment in future capacity.
Key Financial Highlights
- Strong revenue growth of 133%, indicating robust market demand or pricing power in its core sugar business.
- Significant surge in operating expenses (selling, distribution, and administrative), which outpaced gross profit growth and severely squeezed operating margins.
- A notable 37% reduction in finance costs, providing some relief on the substantial interest burden.
- The overwhelming impact of an PKR 884 million tax expense, which completely reversed a 40% improvement at the pre-tax level and led to the widened net loss.
The financial statements are consolidated, so specific segment performance details are not available in this announcement.
Management Outlook & Investor Considerations
Reflecting the substantial losses, the Board of Directors has recommended NIL for cash dividend, bonus shares, right shares, or any other corporate action. However, the increased capital expenditure of PKR 241 million (a nearly 400% increase) suggests management is actively investing in property, plant, and equipment, potentially for future capacity expansion or efficiency improvements, despite the current financial challenges. No specific forward-looking guidance was provided in the announcement.
For investors, ANSM's latest results present a complex picture. The strong revenue growth and significantly improved operating cash flow are positive signals, hinting at underlying operational strength and market presence. Yet, the dramatic increase in net loss, primarily due to an exceptionally high tax expense and rising operating costs, remains a major red flag. The absence of dividends is also a critical factor.
Rational investors should scrutinize the sustainability of revenue growth, the company's ability to control operating expenses, and critically, the future outlook for its tax obligations. The increased CAPEX could be a long-term positive if it translates into enhanced efficiency or capacity. Close monitoring of future disclosures regarding the nature of the tax expense and management's strategy to navigate this challenging profitability landscape will be essential. Ultimately, ANSM's ability to convert its strong operating cash flow into sustainable net profits will be the key determinant of its future valuation.