Cherat Packaging annual profit surges 83% to US$2.34M

PAKISTAN – Cherat Packaging has reported an 83 percent increase in net profit to Rs651 million (US$2.34 million) for the year ended June 30, 2026, driven by a 16 percent rise in net turnover to Rs15.09 billion (US$54.3 million) and significantly improved gross margins.

The company’s earnings per share expanded to Rs13.26 from Rs7.26 in FY25, while the Board of Directors declared a final cash dividend of Rs3.00 per share (30%). 

Cost of sales rose at a slower pace of 10 percent to Rs13.21 billion (US$47.5 million), allowing gross profit to surge by 84 percent to Rs1.88 billion (US$6.76 million), reflecting significantly improved margins on the back of better pricing and cost efficiency. 

Cost Management and Profit Growth

Distribution costs rose 20 percent to Rs367.90 million (US$1.32 million), administrative expenses increased 23 percent to Rs227.78 million (US$819,000), and other expenses more than tripled to Rs80.15 million (US$288,000) from Rs26.00 million. 

In aggregate, operating expenditure rose 30 percent to Rs675.82 million (US$2.43 million), while other income declined 30 percent to Rs269.17 million (US$968,000). 

Despite these headwinds, strong gross profit expansion drove operating profit up 66 percent to Rs1.47 billion (US$5.29 million) from Rs886.41 million. 

The strong profit growth demonstrates the effectiveness of the company’s pricing strategy and cost-control measures in a competitive packaging market.

Financial Performance and Tax Impact

Finance costs declined 17 percent to Rs384.08 million (US$1.38 million), providing a meaningful tailwind, pushing profit before levies and income tax to more than double to Rs1.09 billion (US$3.92 million) from Rs423.84 million, a gain of 157 percent. 

The levy burden eased dramatically, declining 96 percent to Rs4.40 million (US$15,800) from Rs122.41 million, as minimum tax which had been Rs118.02 million last year was absent in the current period. 

Despite a significantly heavier tax burden, with total income tax of Rs432.68 million (US$1.56 million) against a net credit of Rs55.00 million in FY25, the exceptional pre-tax profit growth delivered an 83 percent increase in net profit. 

The company’s strong performance reflects robust demand for its packaging products and effective operational management, positioning Cherat Packaging for continued growth in the coming year.

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