Lahore-based steel roller Ittefaq Iron Industries Limited reported a smaller full-year loss for the year ended June 30, 2026, but remained in the red for a second consecutive year.
The company’s board, which met on September 29, recommended that no cash dividend, bonus shares or rights issue be declared for FY26.
Sales Slip as Gross Loss Narrows
Ittefaq Iron’s net revenue declined to Rs2.40 billion from Rs2.65 billion a year earlier, representing a decrease of around 9 percent.
However, the company managed to reduce its cost of sales more sharply, falling to Rs2.50 billion from Rs3.11 billion.
As a result, the gross loss narrowed substantially to Rs96.9 million from Rs459.3 million in the previous year. Despite the improvement, the company continued to sell its products below cost.
Other operating income also declined, falling to Rs11.7 million from Rs21.3 million.
Lower Finance Costs Limit Loss
Finance costs declined to Rs53.7 million from Rs88.6 million, providing some relief to the company’s bottom line.
However, administrative expenses edged higher to Rs113.4 million, while other operating costs increased sharply to Rs12.1 million from Rs3.6 million.
The combined impact of these expenses kept the company in a loss position, although the deficit was significantly lower than the previous year.
Loss Before Tax Falls 54 Percent
Ittefaq Iron’s loss before tax narrowed to Rs321.3 million from Rs699.8 million in FY25.
After accounting for levies and a small tax charge, the company reported a net loss of Rs322.0 million for FY26, compared with a net loss of Rs658.0 million a year earlier.
Loss per share improved to Rs2.23 from Rs4.56.
Balance Sheet Faces Working Capital Pressure
The company’s shareholders’ equity declined to Rs3.17 billion from Rs3.50 billion.
Unappropriated profit of Rs30.0 million at the end of the previous year turned into an accumulated loss of Rs259.8 million.
Inventory also increased, with stock-in-trade rising to Rs1.16 billion from Rs869.3 million. Meanwhile, trade and other payables surged to Rs698.7 million from Rs207.9 million.
Cash Position Weakens
Ittefaq Iron’s cash and bank balances fell by around half to Rs30.5 million.
Short-term borrowings remained elevated at Rs1.03 billion, highlighting continued pressure on the company’s working capital position.
Despite the weaker cash position, operating cash flow remained positive at Rs65.3 million, although it was below the Rs81.1 million recorded a year earlier.
The company also used cash during the year to repay long-term loans.
Board Withholds Dividend and Other Payouts
The board recommended no cash dividend, bonus shares or rights issue for FY26.
No entitlement date was set, and the company’s share-transfer books will not close for any distribution.
Steel Sector Continues to Face Challenges
Ittefaq Iron manufactures deformed bars, girders, beams and billets at its Kasur mill.
The company’s FY26 results reflect the continuing challenges facing Pakistan’s long-steel sector, including weak sales volumes and tight working capital.
Although Ittefaq Iron substantially reduced its annual loss, the company remained loss-making for a second consecutive year, with higher inventory, elevated short-term borrowings and lower cash balances continuing to weigh on its financial position.