National Refinery Swings to Rs6.16bn Profit After Major FY26 Turnaround

KARACHI: National Refinery Limited has reported a major financial turnaround for the year ended June 30, 2026, posting profit after tax of Rs6.16 billion after recording a Rs14.87 billion loss in the previous financial year. The recovery marks a sharp reversal for the Pakistan Stock Exchange-listed refiner and was supported by substantially stronger refining margins and higher revenue during FY26.

The company's earnings per share improved to Rs77.09 from a loss per share of Rs185.91 in FY25. Revenue from contracts with customers climbed more than 44% year on year to Rs588.55 billion, compared with Rs408.07 billion in the previous year. After accounting for trade discounts, taxes, duties, levies and price differentials, net revenue rose to Rs440.84 billion from Rs307.66 billion.

A key factor behind the turnaround was the improvement at the gross-profit level. Cost of sales increased to Rs417.30 billion from Rs313.90 billion, but the rise was slower than revenue growth. As a result, NRL generated gross profit of Rs23.54 billion in FY26, reversing the Rs6.23 billion gross loss recorded a year earlier. The improvement flowed through to operating performance, with operating profit reaching Rs20.16 billion against an operating loss of Rs7.70 billion in FY25.

The company nevertheless faced higher operating expenses during the year. Distribution costs increased to Rs1.58 billion from Rs891.01 million, while administrative expenses rose to Rs1.36 billion from Rs1.12 billion. Other operating expenses also increased sharply to Rs824.86 million from Rs15.80 million, while other income declined to Rs373.53 million from Rs562.15 million.

NRL also benefited from lower financing costs, which declined by about 10% to Rs9.28 billion from Rs10.33 billion. Profit before taxation and levies reached Rs10.88 billion, compared with a loss of Rs18.03 billion in the previous year. After levies, profit before taxation stood at Rs10.21 billion, reversing the Rs18.44 billion pre-tax loss recorded in FY25.

Taxation reflected the company's return to profitability. NRL booked a tax expense of Rs4.05 billion during FY26, compared with a tax credit of Rs3.57 billion in the preceding year. Despite that charge, the improvement in gross and operating performance was sufficient to produce the Rs6.16 billion full-year net profit.

The results are significant for Pakistan's domestic refining industry, which operates in an environment shaped by international oil prices, exchange-rate movements, financing costs and refining margins. A sustained improvement in refinery profitability can affect companies' ability to maintain operations, manage financial obligations and fund future investment, although the latest financial statement by itself does not establish how long the stronger margin environment will continue.

Attention will now turn to whether National Refinery can maintain the improved operating performance in FY27. Investors are likely to monitor refining margins, petroleum demand, finance costs and subsequent company disclosures for signs that the turnaround can be sustained. No separate management guidance on the next financial year was included in the initial earnings report.