⚡ Flash Summary

Saudi Pak Consultancy Company Limited (SPCL) reported a challenging first quarter for 2025, with a significant decline in total income compared to the same period last year. The company experienced an operating loss before provisions, but a substantial reversal of provisions against leases, loans, and receivables helped to achieve a profit before taxation. However, earnings per share decreased from Rs. 0.21 to Rs. 0.10. Management attributes the income decline to delays in profit receipts on bank balances and slower progress in out-of-court settlements for non-performing portfolios.

📌 Key Takeaways

• 📉 Total income decreased significantly to Rs. 1.42 million from Rs. 14.48 million YoY.
• 💰 Income from finance and operating leases declined to Rs. 1.22 million from Rs. 4.18 million YoY.
• ⚠️ Operating loss before provisions was Rs. (22.13) million, worsening from Rs. (8.40) million YoY.
• ✅ Reversal/provision against leases, loans, and receivables stood at Rs. 25.04 million, up from Rs. 17.86 million YoY.
• 👍 Profit before taxation decreased to Rs. 4.33 million from Rs. 9.46 million YoY.
• 📉 Earnings per share (EPS) declined to Rs. 0.10 from Rs. 0.21 YoY.
• 🏦 Finance costs decreased to Rs. (4.73) million from Rs. (10.57) million YoY.
• 🏢 Administrative expenses increased to Rs. (17.40) million from Rs. (12.31) million YoY.
• 🏦 Cash and bank balances decreased to Rs 53.16 million from Rs. 69.74 million since June 30, 2025.
• 🚫 Company anticipates the conclusion of settlement agreements by the second quarter of the fiscal year ending December 31, 2025.
• 💼 Total assets decreased slightly to Rs 668.51 million from Rs. 686.03 million since June 30, 2025.
• ⚠️ Accumulated losses stand at Rs. (1,618.82) million.
• liabilities decreased to Rs 1,063.35 million from Rs. 1,085.21 million since June 30, 2025.

🎯 Investment Thesis

HOLD. While the company has taken steps to streamline operations and address non-performing assets, the current financial performance and the ongoing uncertainties do not justify a BUY recommendation. A more favorable outlook could be considered if the company demonstrates consistent improvement in earnings and cash flow. Considering the risks and lack of upside, SELL is not appropriate either.