Siemens (Pakistan) Engineering Limited (PSX: SIEM) has reported a sharp decline in earnings for the quarter ended December 31, 2025. The company’s net profit plummeted 94% year-on-year (YoY) to Rs59.9 million, down from Rs1.01 billion in the same quarter last year.
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Earnings per share (EPS) followed this steep decline, falling to Rs7.27 from Rs122.06 in the corresponding period last year.
Financial Performance Highlights:
- Top-Line Growth with Severe Margin Compression: The company’s net sales grew by a healthy 18.5% YoY to Rs1.89 billion. However, profitability was severely impacted as the cost of sales surged by 69.1% to Rs1.65 billion. This led to a 60.8% decline in gross profit to Rs242.8 million, and the company reported an operating loss of Rs75.1 million, compared to an operating profit of Rs395.3 million a year ago.
- Key Financial Contrasts: The operational decline was partially offset by a remarkable 1,112.7% surge in net financial income, which jumped to Rs134.2 million. Furthermore, the company recorded an income tax credit of Rs43.4 million for the quarter, compared to an expense last year, which provided support to the bottom line.
- Impact of Discontinued Operations: A major factor in the YoY profit comparison is the absence of profit from discontinued operations. In the prior-year quarter, discontinued operations contributed Rs688.3 million to profit, whereas there was no such contribution this quarter.
Condensed Statement of Profit or Loss (Quarter Ended Dec 31, 2025 vs. SPLY)
| Description | Q2 FY26 | Q2 FY25 | Change |
|---|---|---|---|
| Net Sales & Services | Rs 1.89 bn | Rs 1.59 bn | +18.5% |
| Cost of Sales & Services | (Rs 1.65 bn) | (Rs 0.97 bn) | +69.1% |
| Gross Profit | Rs 0.24 bn | Rs 0.62 bn | -60.8% |
| Operating Profit/(Loss) | (Rs 0.08 bn) | Rs 0.40 bn | -119.0% |
| Net Profit | Rs 0.06 bn | Rs 1.01 bn | -94.0% |
| Earnings Per Share (PKR) | 7.27 | 122.06 | -94.0% |
The results reflect a challenging quarter marked by significant input cost pressures that outpaced sales growth, leading to severe margin erosion in the company’s core engineering operations.
