⚡ Flash Summary
Merit Packaging Limited’s unaudited financial results for the quarter ended September 30, 2025, reveal a mixed performance. Revenue decreased significantly to PKR 936.738 million from PKR 1,519.786 million in the same quarter last year. However, the company reported a substantial profit of PKR 471.996 million, a turnaround from a loss of PKR 34.976 million in the corresponding period of 2024, primarily driven by a gain on the disposal of the gravure division amounting to PKR 505.660 million. Earnings per share (EPS) also saw a positive shift, reaching PKR 2.36 compared to a loss per share of PKR 0.17 in the previous year.
📌 Key Takeaways
- 📉 Revenue declined significantly by 38.36% YoY, from PKR 1,519.786 million to PKR 936.738 million.
- ⬆️ Gross profit decreased by 34.6% YoY, from PKR 99.197 million to PKR 64.856 million.
- 💰 Operating profit decreased substantially by 64.7% YoY, from PKR 35.872 million to PKR 12.646 million.
- ✅ The company recorded a significant gain of PKR 505.660 million from the disposal of its gravure division.
- ⬆️ Profit before tax drastically improved to PKR 471.996 million, compared to a loss of PKR 34.976 million in the prior year.
- ⬆️ Earnings per share (EPS) turned positive, reaching PKR 2.36, compared to a loss per share of PKR 0.17 in the same quarter last year.
- ⬇️ General and administrative expenses decreased from PKR 44.292 million to PKR 42.059 million.
- ⬇️ Selling and distribution expenses decreased from PKR 25.012 million to PKR 21.753 million.
- ⬆️ Other income increased from PKR 8.841 million to PKR 14.963 million.
- ⬇️ Cash generated from operations is negative PKR 213.234 million compared to positive PKR 144.560 million.
- ✅ Proceeds from the sale of operating fixed assets are PKR 800.000 million.
- ⬇️ Cash and cash equivalents decreased from PKR (700.080) million to PKR (319.616) million.
🎯 Investment Thesis
Given the mixed financial performance and the significant impact of a one-time gain, a HOLD recommendation is appropriate. The company’s declining revenue and negative operating cash flow are concerning, warranting caution. The price target should be revisited once the financial impact of the disposed gravure division normalizes and a clearer picture of the company’s core performance emerges. Time horizon: Medium-Term.
Disclaimer: AI-generated analysis. Not financial advice.