AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore: Kohinoor Textile Mills (KTML) shared insights into its financial performance and future prospects during a corporate briefing session hosted by Topline Securities. The briefing highlighted notable shifts in the company’s margins across various segments due to market conditions and strategic operational changes.
The company reported a decrease in gross margins for both the home textile and spinning segments in the fiscal year 2025. Home textile margins fell from 23.2% to 19.9%, while spinning margins saw a slight decline from 15.5% to 15.1%. The drop in spinning margins was attributed to the influx of Chinese yarns, leading to reduced yarn prices. Meanwhile, the home textile segment’s margin reduction was linked to increased labor costs following a rise in minimum wages, compounded by a stable exchange rate between the Pakistani rupee and the US dollar.
Conversely, weaving margins experienced a significant improvement, rising from 8.3% to 15.6%. This uptick was driven by a higher contribution of exports to the sales mix, the strategic use of Chinese yarn as a raw material, and a reduction in power costs, thanks to enhanced solar energy utilization.
Looking ahead, KTML’s management expressed optimism about the narrowing price gap between Pakistani and Chinese yarn, particularly in higher count yarn, which is expected to boost sales. Additionally, government initiatives to reduce utility costs could further enhance profitability. If the Rs28.9/kWh tariff benefit is extended to KTML, it would positively affect both sales and margins.
In terms of sales, the spinning division saw a decline from Rs29.4 billion to Rs28.7 billion, while weaving sales increased from Rs13.1 billion to Rs14.9 billion. Home textile sales experienced a marginal rise from Rs15.7 billion to Rs15.9 billion. Notably, weaving exports grew from Rs4 billion to Rs6.1 billion.
The overall sales mix shifted slightly, with exports accounting for 36% in FY25, up from 33% in FY24, as exports rose from US$68.1 million to US$76.4 million.
The company’s energy mix in FY25 consisted of a total load of 24.6 MWh, with contributions from the national grid, solar power, heavy fuel oil, and bowser gas. The average power cost decreased to Rs30.5/kWh from Rs34.2/kWh in the previous fiscal year.
KTML’s unconsolidated profit after tax for FY25 rose by 25%, reaching Rs2.7 billion, compared to Rs2.2 billion in FY24, reflecting an earnings per share of 2.04.