Unity Foods swings to quarterly profit on soaring other income, lower finance costs

Unity Foods Limited (PSX: UNITY) reported a net profit after levies and taxation of Rs95.97 million for the quarter ended September 30, 2025, marking a significant turnaround from a net loss of Rs141.15 million in the same period last year.

Key Financial Highlights (Q1 FY26):

• Earnings/(Loss) Per Share: Stood at a profit of Rs0.08, compared to a loss of Rs0.12 in Q1FY25.

• Gross Turnover: Declined 28.54% to Rs10.61 billion.

• Net Turnover: Fell 27.67% to Rs9.35 billion.

• Gross Profit: Decreased 39.87% to Rs1.10 billion, with the margin compressing to 11.8%.

• Operating Profit: Declined 8.13% to Rs1.49 billion.

• Net Profit Margin: Stood at 1.0%, a positive turnaround from -1.1% in Q1FY25.

The company's return to profitability was not driven by its core operations but by exceptional financial management and other income. While the top line weakened, with gross turnover falling 28.54%, the company demonstrated disciplined cost control. The cost of sales declined at a slightly slower rate than revenue, leading to a compressed gross margin.

The pivotal factor in the profit swing was a massive 229.40% increase in other income, which surged to Rs818.72 million from Rs248.55 million last year. This was complemented by a substantial 21.19% reduction in finance costs, which eased significantly to Rs1.25 billion. Effective control over selling and administrative expenses further supported the bottom line. This combination of factors enabled the company to post a profit before levies and taxation of Rs234.29 million, a surge of over 716% from the previous year, successfully navigating a period of softer sales.