⏸️ SFL: HOLD Signal (6/10) – Transmission of Annual Report for the Year Ended June 30, 2025

📌 Key Takeaways

• ⬆️ Revenue increased by 6.6% from Rs. 47.42 billion to Rs. 50.56 billion.
• 📉 Operating margins decreased due to weaker demand and increasing input costs.
• 💰 Received Rs. 18.60 billion in dividend income from subsidiary, associated, and portfolio companies.
• 🌱 Gross profit decreased to 8.80% of sales, down from 11.95% the previous year.
• 💸 EPS increased to Rs. 661.62, up from Rs. 163.17 in the prior year.
• ✅ Directors recommend maintaining cash dividend at 100%.
• 🇵🇰 Pakistani economy is improving with low interest, stable exchange, and a narrowing current account deficit.
• 🌊 Country faces additional pressure from widespread flooding impacting agricultural regions.
• ⚡ High energy costs, high taxation, and low domestic cotton supply challenge the textile industry.
• 🤝 Management focuses on strategic alliances and innovation.
• 🌱 Focus remains on operational efficiency and new geographies.
• 🔄 Approved scheme for Reliance Cotton Spinning Mills Limited (RCSML) to merge with Sapphire Fibres Limited.
• 🤝 Related party transactions are done arm’s length.
• 🌱 Focused on enhancing environmental performance, promoting social equity, and strengthening governance structures.

🎯 Investment Thesis

The annual report provides little to no details for the company, and as such it is too difficult to have an appropriate, researched, and accurate response. The recommendation is to HOLD this company due to the amount of missing financial statements, as without those elements any answer is inaccurate.