War dents PABC’s plans to invest in expanding production into Afghan market

Pakistan Aluminium Beverage Cans Limited has ended 2025 with higher sales but lower profits, a result that captures the company’s central problem: demand for cans remains intact, but the geography of that demand has become harder to serve.

The company reported earnings of Rs 5.2 billion for calendar year 2025, translating into earnings per share of Rs 14.4, compared with Rs 6.1 billion and earnings per share of Rs 16.9 a year earlier. That 14.5% decline came despite net sales rising 4% to Rs 24.0 billion from Rs 23.1 billion, according to AKD Securities, which summarised the company’s analyst briefing held on May 11. Gross margins fell to 32.7% from 36.6%, showing that the problem was not a collapse in topline, but pressure on profitability.

The split between local and export sales tells the bigger story. Domestic sales increased 16% to Rs 10.0 billion from Rs 8.6 billion, but export sales fell to Rs 14.0 billion from Rs 14.5 billion. AKD attributed the decline in exports mainly to the closure of the Afghan border since October 2025. Can volumes were almost flat at 940 million, while capacity utilisation dropped to 82% from 89%.

For most companies, a half-billion-rupee decline in exports would be a bad year-end inconvenience. For PABC, it cuts into the core of the business model. Management told investors that Afghanistan accounts for 80% of the company’s export sales. The earlier reported numbers give a sense of that dependency: in 2024, export sales were Rs 14.5 billion, of which roughly Rs 12 billion came from Afghanistan alone. That means Afghanistan was not a side market. It was the export market.

That is why the border closure matters beyond one year’s earnings. PABC had not only been selling into Afghanistan; it had also planned to deepen its exposure there. Its board has approved a proposed can plant project in Afghanistan with capacity of 1.3 billion cans and estimated cost of US$110 million, subject to regulatory approvals. AKD noted that the timeline for the project remains uncertain.