April 28, 2026 (MLN):  Fauji Foods Limited (PSX: FFL) reported a 10% decline in its consolidated net profit for the first quarter ended March 31, 2026, recording Rs301.59m compared to Rs335.40m in the corresponding period last year.

Reflecting this bottom-line contraction, the company's basic and diluted earnings per share (EPS) edged down to Rs0.12 from Rs0.13 in Q1 2025.

The profit dip occurred despite a steady top-line expansion, as rising operating expenses and a drop in secondary income pressured margins.

FFL’s net revenue from contracts with customers posted an 8% year-on-year increase, rising to Rs8.54bn from Rs7.91bn.

The cost of revenue grew in tandem by 8%, reaching Rs7bn.

Driven by the sheer volume of revenue expansion, the company’s gross profit secured a 9% increase, settling at Rs1.54bn compared to Rs1.41bn in the prior year.

However, the company faced significant inflationary pressures on its overheads.

Marketing and distribution expenses spiked by 21% to Rs840.38m, while administrative expenses rose by 5% to Rs259.54m.

These rising operational costs entirely consumed the gross margin gains, causing the profit from operations to dip by 5% to Rs439.27m.

Below the operating line, FFL experienced further headwinds. "Other income" fell by 25% to Rs98.13m, and finance costs increased by 20% to Rs20.32m.

Although other expenses declined by 22% to Rs40.12m, the profit before levy and income tax still registered a 9% decline, settling at Rs476.96m.

The company was also hit by a massive surge in statutory levies, which jumped to Rs25.09m from Rs8.63m.

This pushed the profit before income tax down by 12% to Rs451.87m.

Ultimately, even with a 16% reduction in its income tax expense (which dropped to Rs150.28m), Fauji Foods closed the quarter with a 10% decline in final net profit, settling at Rs301.59m.