April 24, 2026 (MLN): Bata Pakistan Limited (PSX: BATA) reported a severe financial downturn for the year ended December 31, 2025, swinging from a net profit of Rs850.73m in the previous year to a massive net loss of Rs2.39bn.

The company’s bottom line was battered by a perfect storm of shrinking sales, rising direct costs, and skyrocketing impairment charges.

BATA's net revenue from contracts with customers posted a 3% year-on-year decline, falling to Rs17.78bn from Rs18.33bn.

Conversely, the cost of sales surged by 15% to Rs10.76bn from Rs9.32bn. This combination severely squeezed core margins, causing the gross profit to plunge by 22% to Rs7.02bn down from Rs9.01bn in 2024.

Operational overheads compounded the top-line pressures. Administrative expenses spiked by 29% to Rs2.44bn, while distribution costs increased by 6% to Rs5.60bn.

The most alarming operational blow came from a staggering surge in net impairment losses on financial assets, which soared to Rs651.81m compared to just Rs35.01m last year.

Additionally, other expenses jumped 64% to Rs173.69m, while secondary support vanished as "other income" plummeted 71% to Rs106.99m.

Below the operating line, finance costs also crept up by 15% to Rs773.31m.

Crushed under the weight of declining gross margins, surging impairments, and higher overheads, the company's profitability entirely collapsed.

BATA recorded a loss before taxation and levy of Rs2.51bn, entirely reversing the Rs1.38bn profit from the previous year.

The company also booked a new minimum tax levy of Rs246.07m, pushing the loss before income tax deeper to Rs2.75bn.

Although BATA received a positive income tax credit of Rs368.69m (compared to a tax expense of Rs533.63m in 2024), it was nowhere near enough to rescue the bottom line, leaving the final net loss for the year at a heavy Rs2.39bn.

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