Waves Corporation Limited, a major producer of refrigerators and home appliances, reported a sharp decline in profitability in FY2025 despite a strong recovery in sales.
The company’s profit after tax fell to Rs530 million from Rs1.09 billion a year earlier, while earnings per share dropped to Rs1.89 from Rs3.86.
Sales Recover But Profit Remains Under Pressure
Waves’ gross sales increased to Rs6.37 billion in FY2025 from Rs5.07 billion, while net sales reached Rs4.78 billion.
Gross profit also improved to Rs1.34 billion, showing that the recovery in sales translated into some improvement at the operating level.
However, higher revenue was not enough to offset other pressures on the business.
Finance Costs Remain A Major Challenge
Finance costs stood at Rs636 million, only slightly below Rs700 million recorded in the previous year.
The relatively high financing burden continued to consume a significant portion of the company’s operating earnings.
Other expenses also increased during the year, further limiting the company’s ability to improve its bottom line and strengthen its balance sheet.
Other Income Also Declines
Waves’ other income fell to Rs1.36 billion from Rs1.74 billion in FY2024.
The decline was significant because other income had provided considerable support to the previous year’s profitability.
Combined with high finance costs and rising expenses, the lower other income contributed to the sharp decline in annual earnings.
Company Pursues Expansion And Rights Issue
Waves Home Appliances, the group’s manufacturing arm, is moving ahead with a rights issue aimed at supporting working capital requirements and future expansion.
The company is also developing a new manufacturing facility that will increase production capacity for refrigerators, freezers, air conditioners and other household appliances.
Management is further working to restart and expand product lines that previously faced operational constraints.
Diversified Business Structure
Waves Corporation has interests extending beyond appliance manufacturing.
The group operates the Waves Plus retail network, which serves more than 400,000 customers, while also holding real-estate assets, including strategically located land in Lahore near Multan Road and Thokar Niaz Baig.
These assets could provide additional opportunities as the company works to strengthen its financial position.
Finance Costs Remain Key Risk
Waves’ FY2025 results show that improving sales alone may not be enough to restore profitability.
The company’s ability to reduce financing costs, control expenses and improve operating efficiency will be crucial going forward.
The planned rights issue and additional manufacturing capacity could support future growth, but stronger balance-sheet management will remain essential for turning higher sales into sustainable profits.