DSFL

⚡ Flash Summary

Dewan Salman Fibre Limited reported a net loss after taxation of Rs. 51.209 million for the quarter ended September 30, 2025, compared to a gain of Rs. 242.924 million in the same period last year. The company’s operations have been closed since December 2008 due to working capital constraints. Management is focused on negotiating debt restructuring with lenders and remains confident in achieving favorable outcomes. The textile sector faces challenges including declining export orders and rising costs, impacting PSF demand.

📌 Key Takeaways

• 📉 Net loss after taxation of Rs. 51.209 million for Q1 2025, a significant decline from a gain of Rs. 242.924 million in Q1 2024.
• 🏭 Operations remain closed since December 2008 due to working capital constraints.
• 💰 Accumulated losses have reached Rs. 23.630 billion as of September 30, 2025.
• 🚧 Negative equity of Rs. 17.925 billion, highlighting severe financial distress.
• 💼 Management is actively negotiating debt restructuring with lenders.
• 🤝 Confident in securing favorable outcomes from debt restructuring.
• 📉 Textile sector faces challenges, including declining export orders and rising costs.
• ⬇️ Reduced PSF demand in Q1 2025 due to textile sector struggles.
• ⚔️ Ongoing litigation with lenders for repayment of liabilities.
• 🚫 No sales recorded during the period under review (Rs. Nil).
• ⚠️ Current liabilities exceed current assets by Rs. 20.958 billion.
• 🏭 Underutilized supply capacity due to low demand in the domestic PSF market.

🎯 Investment Thesis

Given the severe financial distress, negative equity, and ongoing operational shutdown, a SELL recommendation is warranted. The company faces significant risks, and the potential for recovery is highly uncertain. Investors should avoid this stock due to the high risk of further losses.

⚡ Flash Summary

Dewan Salman Fibre Limited (DSFL) held its Annual General Meeting on October 28, 2025, where the minutes of the previous meeting were confirmed, and the audited financial statements for the year ended June 30, 2025, were approved. The company’s statutory auditors, Feroze Sharif Tariq & Co., were re-appointed for the ensuing year. The meeting minutes revealed that the company’s operations remained closed during the year, resulting in nil turnover and a gross loss of Rs 283.045 million, primarily due to depreciation and fixed expenses. Auditors have expressed an adverse opinion on the financial statements due to the company’s use of the going concern assumption.

📌 Key Takeaways

• 🗓️ AGM held on October 28, 2025.
• ✅ Minutes of the preceding General Meeting held on September 26, 2025, were confirmed.
• 💰 Annual Audited Financial Statements for the year ended June 30, 2025, were approved.
• 🏢 Feroze Sharif Tariq & Co. re-appointed as Statutory Auditors.
• 🤝 CEO authorized to negotiate auditor remuneration.
• 🏭 Operations remained closed during the year ended June 30, 2025.
• 📉 Turnover was nil for the year ended June 30, 2025.
• 💔 Gross loss of Rs 283.045 million reported (vs. Rs 411.875 million in 2024).
• ⚠️ Auditors expressed an adverse opinion on financial statements.
• 🏦 Company is in negotiation with banks for restructuring proposals.
• 🌐 Import meets the shortfall of polyester fibre and acrylic fibre.
• 🚧 Restructuring proposals are under discussion with financial institutions but have not yet yielded positive outcomes.
• 📜 Auditors referred to Note 6.2 regarding non-valuation of leasehold land.
• 🚫 No provision for markup due to pending restructuring.
• 📊 Management confident restructuring with waiver of markup will be accepted.

🎯 Investment Thesis

Based on the information available, a SELL recommendation is warranted. The company’s operational shutdown, significant losses, and the auditor’s adverse opinion indicate a high risk of further financial deterioration. The reliance on restructuring proposals, without guaranteed success, adds further uncertainty. Price target is close to zero. The time horizon is short term.

⚡ Flash Summary

Dewan Salman Fibre Limited’s (DSFL) Annual Report for the year ended June 30, 2025, reveals a challenging financial landscape marked by continued operational closure and significant accumulated losses. The company’s turnover remained nil due to the cessation of manufacturing activities since December 2008. While management is actively pursuing debt restructuring with financial institutions, an adverse opinion has been issued by the auditors regarding the use of the going concern assumption, adding further uncertainty. The report highlights the Company’s endeavors to navigate these difficulties, including efforts to reduce costs and manage feedstock price changes.

📌 Key Takeaways

• ❌ DSFL reported zero revenue for the year ended June 30, 2025.
• 📉 The company experienced a Gross Loss of PKR 283.045 million.
• 😓 Operating Loss widened to PKR 345.904 million.
• ⛔ Auditors issued an adverse opinion due to concerns about the ‘going concern’ assumption.
• ⚠️ Financial statements preparation is questionable.
• 🔍 Trade debts are stagnant, raising concerns about recovery.
• 📉 Loss per share stood at (PKR 1.04).
• 🚫 No dividend declared due to adverse financial conditions.
• 🏢 Company’s operations have been closed since December 2008.
• 🤝 Debt restructuring proposals are ongoing with financial institutions.
• 🌍 PSF market faces significant competition from international players.
• 🇵🇰 The company is exposed to Pak Rupee depreciation risk against the US Dollar.
• 🚫 The company is lacking the Non-availability of banking lines.

🎯 Investment Thesis

Due to the adverse opinion from auditors, continued operational closure, increasing losses, significant debt and the inherent risks, a SELL recommendation is warranted. There is no reason to expect a turnaround, considering existing challenges and auditors’ concerns. A price target is based on potential asset liquidation value, though highly uncertain. Any potential investor should avoid this security, as per the current situation and report.