July 25, 2025 | AZEE Securities

KSE-100 Index: 139,207 ▲ 0.37%

SIEM: PKR 1,520 ▼ 0.33%

Siemens Pakistan Engineering Co. Ltd. (PSX: SIEM) has posted a net profit of Rs769.05 million (EPS: Rs93.25) for the nine-month period ending June 30, 2025, marking a sharp turnaround from a net loss of Rs1.56 billion (LPS: Rs189.02) in the same period last year.

Topline Performance:

• Net Sales dipped by 2.37% YoY to Rs6.43 billion.
• Cost of Sales rose marginally by 0.63%, compressing gross profit by 11.82% to Rs1.14 billion.

Operational Pressure:

• Marketing & Selling Expenses: surged 22.06% to Rs844.4 million.
• Administrative Expenses: climbed 37.68% to Rs102.64 million.
• Other Income: declined sharply by 75.16% to just Rs1.67 million.
• Other Operating Expenses: increased 48.80% to Rs34.79 million, pushing net other operating costs to Rs33.12 million.
• As a result, Operating Profit dropped 62.31% to Rs213.4 million.

Financial Income the Key Driver:

• Financial Income skyrocketed by 1,729% to Rs271.99 million.
• Despite a 144% rise in Financial Expenses (Rs32.31 million), Net Financial Income jumped to Rs239.68 million (vs. Rs1.64 million last year).

Profit Before Tax:

• From continuing operations: Rs453.08 million (▼20.22% YoY).
• After taxation and levy, net profit from continuing operations declined by 90.32% to Rs44.97 million.

Discontinued Operations Boost Earnings:

• Siemens reported a net profit of Rs724.09 million from discontinued operations, compared to a loss of Rs2.02 billion in 9MFY24.

Bottom Line:

Despite weak operational performance, extraordinary gains from discontinued operations and financial income drove the company back into profitability. Siemens Pakistan’s strategic asset realignment and treasury gains played a crucial role in this recovery.

Investors should note that earnings per share (EPS) from continuing operations fell to Rs5.45, down from Rs56.33, reflecting the impact of core business challenges.

While the core operations remain under margin pressure, the turnaround reflects improved financial discipline and restructuring benefits. Long-term sustainability will depend on a revival in core earnings and improved cost control.