⚡ Flash Summary
SG Power Limited’s 2025 annual report reveals a tumultuous year with significant financial challenges. Sales plummeted from PKR 17.30 million to PKR 6.15 million, resulting in a loss of PKR 8.40 million compared to a profit of PKR 1.67 million the previous year. The company’s accumulated losses have ballooned to PKR 266.78 million, raising concerns about its ability to continue as a going concern. Despite these challenges, management is exploring alternative energy sources and has received financial support commitments from directors and associated companies.
📌 Key Takeaways
- 📉 Sales decreased significantly from PKR 17.30 million in 2024 to PKR 6.15 million in 2025.
- ⛔ Company reported a net loss of PKR 8.40 million in 2025, a stark contrast to the PKR 1.67 million profit in 2024.
- ⚠️ Accumulated losses increased to PKR 266.78 million, raising concerns about long-term viability.
- ⛽ Generation costs decreased to PKR 7.93 million but are still a major burden.
- ⬆️ Administrative and selling expenses rose dramatically to PKR 6.62 million.
- 💸 Loss per share is PKR -0.47.
- 😬 Auditors express material uncertainty related to the company’s ability to continue as a going concern.
- 🤝 Crescent Star Insurance Limited acquired a 38.05% stake in SG Power post-year-end for PKR 6 per share.
- 🚫 The company has negative cash flow from operations of PKR (1,319,265).
- ✔️ Management is exploring alternative energy sources, such as solar, to mitigate costs.
- 🧾 There were instances of non-compliance with the code of corporate governance.
- 🏛️ The Board of Directors decided to forgo fees to improve company financial state.
- 🏦 There is director loan of PKR 1,913,262.
🎯 Investment Thesis
Given the significant financial challenges, a SELL recommendation is appropriate. The company’s going concern status is under question, and the substantial accumulated losses indicate a high degree of financial distress. The recent acquisition by Crescent Star Insurance does provide some liquidity, but it is only for the shares sold to them. The negative outlook for the near-term future makes investment in SG Power Limited highly speculative and risky.
Disclaimer: AI-generated analysis. Not financial advice.