Searle Company Reports Lower-Than-Expected Earnings Amid Decline in Sales

Karachi: Searle Company Ltd (SEARL) has announced its fourth-quarter financial results for fiscal year 2025, recording an unconsolidated profit of Rs165 million with earnings per share (EPS) of Rs0.32. This marks a recovery from a significant loss of Rs3,442 million in the same quarter the previous year. However, the earnings fell short of projections due to decreased sales and a higher tax charge.

For the full fiscal year 2025, the company’s earnings amounted to Rs434 million, with an EPS of Rs0.85, compared to a loss of Rs3,331 million in fiscal year 2024. The results were impacted by an impairment loss of Rs927 million on an investment in a subsidiary. Excluding this impairment, the EPS would have stood at Rs1.9 for FY25.

Despite the challenges, Searle has declared a bonus share issuance of 15% along with its financial results. The company’s net sales in the fourth quarter decreased by 16% year-over-year and 5% quarter-over-quarter to Rs5.6 billion. This brought the total sales for FY25 to Rs24.7 billion, a decline of 4% from the previous year.

Gross margins improved slightly to 52.6% in the fourth quarter, up from 50.7% in the same quarter last year. For FY25, the gross margins averaged 50.8%, a rise from 48.6% in FY24.

Distribution expenses saw an increase of 13% year-over-year and 24% quarter-over-quarter, totaling Rs2,234 million. Meanwhile, the finance cost decreased by 65% year-over-year and 10% quarter-over-quarter, attributed to lower interest rates and reduced borrowing.

The effective tax rate for the fourth quarter was 50.6%, a significant rise from 8.7% in the third quarter. Over the fiscal year, the company recorded a tax charge of Rs300 million, compared to a tax reversal of Rs1,141 million in FY24.

Searle is currently trading at a price-to-earnings ratio of 17.8x for FY26 and 11.7x for FY27.