SURC reported earnings per share of PKR 22.92 in FY25 (FY24: PKR 20.62). Furthermore, in 1QFY26, EPS stood at PKR 8.12 (1QFY25: 3.83). Fabric sales increased by approximately 4% in terms of sales value.
Yarn sales marginally decreased in value. Out of Total turnover PKR 27.4 billion, weaving (fabric) contributed PKR 16.5 billion and spinning yarn contributed PKR 11 billion. Exports are very minimal; the contribution was PKR 972 million out of PKR 27.4 billion in total sales.
The current sales mix is approximately 50-50% of total turnover (Yarn/Fabric). Historically, yarn sales were higher, but the closure of the Nooriabad unit reduced the yarn sales quantum. China is selling a lot of yarn in Pakistan; the price of Chinese yarn is currently almost equal to or below the Pakistan level, despite sales tax duty. The Nooriabad unit was incorporated around 1984/1985.
After 40 years, the machinery is now considered obsolete. The company has decided to dispose of the old machinery. The company is retaining the land and building and part of the machinery. No current planning is underway for upgrading or reviving the plant; the decision will be made after machinery disposal. Management noted that the Nooriabad area is becoming a critical area for wind power.
Going forward, the strategy is to start value addition. Currently, SURC is working on Home Textiles and has started a pilot project. The yarn business remains viable for SURC because it operates a large Weaving Unit about 300 looms. In-house consumption of yarn is substantial, estimated at 60 70%. This integrated value addition protects the company from issues that disturb other independent spinning units. The Spinning unit performed well in the first quarter, though not as strongly as the Weaving unit. The customer base for external yarn sales includes large, renowned groups such as Nishat, Omer, Adamjee, and Gul Ahmed.
The company has 9 MW of solar installed on both Punjab units. They rely on a mix of solar, grid electricity, and gas. Gas use is necessary because government regulations impose a limit on grid usage, and expanding the grid capacity is prohibitively expensive. The estimated electricity cost is approximately PKR 35 to PKR 36 per unit. The company is in negotiations to install more solar capacity on both sites, expected to be completed in 2026.
Important Disclosures
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