April 28, 2026 (MLN): The Organic Meat Company Limited (PSX: TOMCL) reported a 16% decline in its consolidated net profit for the nine months ended March 31, 2026, recording Rs387.71m compared to Rs459.76m in the corresponding period last year.

Reflecting this bottom-line contraction, the company's restated basic and diluted earnings per share (EPS) dropped to Rs1.97 from Rs2.34 in 9MFY25.

The profit decline was primarily driven by a drop in top-line sales, which squeezed core margins.

TOMCL’s net sales posted an 8% year-on-year decrease, falling to Rs10.44bn from Rs11.32bn. While the company managed to reduce its cost of sales by 7% (down to Rs9.54bn), the reduction was not enough to offset the lower revenue volume.

Consequently, the gross profit contracted significantly by 19%, dropping to Rs902.37m from Rs1.12bn in the prior year.

On the operational front, the company successfully curtailed its overheads across the board. Administrative expenses dropped by 5% to Rs207.53m, selling expenses fell 10% to Rs241.56m, and the allowance for doubtful debts plunged by a massive 61% to just Rs31.54m.

 Despite this commendable 15% overall reduction in operating expenses, the shrinking gross margins pushed the operating profit down by 23% to Rs421.74m.

Below the operating line, TOMCL saw substantial relief in debt servicing, with finance costs plummeting by 60% to Rs52.91m from Rs133.69m. However, this was accompanied by a sharp 59% decline in net other income, which fell to Rs68.78m from Rs169.76m last year.

Dragged down by the lower operating profit, the profit before taxation and levy dropped 25% to Rs437.61m.

 A major bright spot for the company was the complete absence of a statutory levy this period, which had cost a heavy Rs137.64m in 9MFY25. This relief cushioned the pre-tax profit, which only registered a mild 2% decline to Rs437.61m.

The final blow to the bottom line came from taxation. Unlike the same period last year, where TOMCL benefited from a tax credit of Rs12.33m, the company booked a tax expense of Rs49.90m this period. This tax reversal, combined with the core operational dip, resulted in the final net profit settling at Rs387.71m.