Key Takeaways
- PAKL, a public limited company established in 1971, reported significant losses over the past few years.
- The company's topline declined by 49.98% in 2021 due to reduced export sales and local market challenges.
- Margins improved significantly in recent years, with operating margins turning positive.
PAKL, a public limited company incorporated in Pakistan since 1971, has reported a series of financial challenges over the past few years. As of June 30, 2025, PAKL had a total of 3.4 million shares outstanding, held by 599 shareholders. The majority stake is owned by sponsors' associates and friends at 43.08%, followed closely by directors, their spouses, and minor children with 36.18%.
Historically, PAKL has faced significant financial difficulties, posting net losses in 2021, 2022, and 2023 due to consistent net losses since 2014. The company's liabilities have consistently exceeded its total assets, leading to negative working capital for the years under consideration.
In 2021, PAKL experienced a sharp decline in net sales by 61% compared to the previous year, primarily due to lockdowns imposed in various export destinations. This was compounded by a 49.98% drop in overall revenue from Rs.132.94 million to Rs.108.36 million. Cost of sales also fell significantly by 46.51%, while gross profit margin dropped to just 3.48%. Operating expenses, however, saw a substantial reduction of 79.55%.
Other income declined sharply by 94.35% due to the absence of loan waivers and mark-ups from the previous year. These factors contributed to an operating loss of Rs.6.43 million in 2021, resulting in a net loss of Rs.8.70 million with a loss per share of Rs.2.56. This was a stark contrast to the EPS of Rs.14.35 and NP margin of 22.52% recorded in 2020.
However, PAKL's performance improved significantly in subsequent years. In 2022, the company saw a 22.68% increase in topline revenue to Rs.132.94 million, driven by some improvement in local sales and reduced export challenges. Gross margin improved, although operating and net margins remained negative.
In 2024 and 2025, PAKL's margins posted a phenomenal growth, with operating margins turning positive for the first time since 2014. This improvement was attributed to better cost management and increased efficiency in operations. Despite these improvements, the company continues to face challenges related to its high level of liabilities and negative working capital.
PAKL’s historical performance highlights the ongoing struggles faced by the leather crafts industry in Pakistan, particularly with regard to export markets. The company's ability to navigate these challenges will be crucial for future success.
