Bata Pakistan Limited (PSX: BATA) reported a severe financial downturn for the year ended December 31, 2025, swinging from a net profit of Rs850.73 million in the previous year to a substantial net loss of Rs2.39 billion. The company’s bottom line was battered by a perfect storm of shrinking sales, rising direct costs, and skyrocketing impairment charges.
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The company’s net revenue from contracts with customers posted a 3% year-on-year decline, falling to Rs17.78 billion from Rs18.33 billion. Conversely, the cost of sales surged by 15% to Rs10.76 billion from Rs9.32 billion. This combination severely squeezed core margins, causing the gross profit to plunge by 22% to Rs7.02 billion, down from Rs9.01 billion in 2024.
Operational Overheads and Impairments Compound Woes
Operational overheads compounded the top-line pressures. Administrative expenses spiked by 29% to Rs2.44 billion, while distribution costs increased by 6% to Rs5.60 billion. The most alarming operational blow came from a staggering surge in net impairment losses on financial assets, which soared to Rs651.81 million, compared to just Rs35.01 million last year.
Additionally, other expenses jumped 64% to Rs173.69 million, while secondary support vanished as “other income” plummeted 71% to Rs106.99 million. Below the operating line, finance costs also crept up by 15% to Rs773.31 million.
Bottom-Line Collapse
Crushed under the weight of declining gross margins, surging impairments, and higher overheads, the company’s profitability entirely collapsed. Bata recorded a loss before taxation and levy of Rs2.51 billion, entirely reversing the Rs1.38 billion profit from the previous year. The company also booked a new minimum tax levy of Rs246.07 million, pushing the loss before income tax deeper to Rs2.75 billion.
Although Bata received a positive income tax credit of Rs368.69 million—compared to a tax expense of Rs533.63 million in 2024—it was nowhere near enough to rescue the bottom line, leaving the final net loss for the year at a heavy Rs2.39 billion. Consequently, the loss per share stood at Rs315.48, against an earnings per share of Rs112.53 in the previous year.
About Bata Pakistan Limited
Bata Pakistan Limited (PSX: BATA) is a subsidiary of the Bata Shoe Organization, engaged in the manufacturing and retailing of footwear and accessories. The company operates one of the largest retail networks in the country.
