October 30, 2025 (MLN): Merit Packaging Limited (PSX: MERIT) reported a profit after tax of Rs472.0m for the quarter ended September 30, 2025, a remarkable turnaround from a loss of Rs35.0m in the corresponding period last year.

Earnings per share stood at Rs2.36 compared to a loss per share of Rs0.17 in SPLY, marking a significant improvement in shareholder returns.

Revenue declined 38.4% year-on-year to Rs936.7m from Rs1,519.8m, showing softer sales during the period. Cost of sales decreased proportionally by 38.6% to Rs871.9m from Rs1.42bn.

Gross profit contracted 34.6% to Rs64.86m against Rs99.20m, with the gross margin improving to 6.9% from 6.5% in the prior year, indicating modest margin expansion despite lower sales volumes.

General and administrative expenses declined 5% to Rs42.06m from Rs44.29m, while selling and distribution expenses decreased 13% to Rs21.75m from Rs25.01m.

Other operating expenses increased 17.4% to Rs3.36m from Rs2.86m last year. Other income surged 69.3% to Rs14.96m from Rs8.84m, providing additional support.

Operating profit declined 64.8% to Rs12.65m from Rs35.87m in the previous year. However, the company recorded an exceptional gain on disposal of gravure division amounting to Rs505.7m, which transformed the quarterly performance.

Financial charges declined 33.5% to Rs34.53m from Rs51.89m in SPLY, providing relief on the financing front. Minimum tax differential decreased 37.9% to Rs11.78m from Rs18.96m.

The company concluded 1QFY26 with a profit for the period of Rs472.0m, delivering a net profit margin of 50.4% compared to -2.3% in 1QFY25.