KARACHI: Pakistan Refinery Limited turned a brutal loss year into a record Rs15.78 billion profit for FY2026. Shareholders still get nothing. The board approved the audited accounts, and once again recommended a nil dividend.

Earnings per share tell the real story of how sharp this reversal was Rs25.05 this year against a loss of Rs7.40 last year. That's a swing of roughly Rs20.4 billion in a single financial year. And the company didn't get there mainly by selling more fuel. It got there by protecting margins while costs barely moved.

Revenue rose to Rs350.8 billion from Rs310.4 billion, up just over 13%. Compare that to gross profit, which rocketed to Rs32.4 billion from Rs1.9 billion more than sixteen times higher. Cost of sales grew only 3.2% to Rs318.5 billion. Sales grew modestly; costs stayed flat; margins did the heavy lifting. The numbers point to a dramatic improvement in refining margins during the year, though PRL's financial disclosure doesn't break down the precise drivers behind that expansion.

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Operating profit landed at Rs28.6 billion, a full reversal from an operating loss of Rs176.6 million a year earlier. Finance costs, though, kept climbing Rs4.45 billion versus Rs3.79 billion a sign that short-term borrowing still funds a chunk of PRL's daily operations even as rates stay punishing.

Then came the tax bill. PRL booked an Rs8.37 billion charge this year, a hard reversal from the Rs1.13 billion tax credit it enjoyed in FY2025. That single line item took a real bite out of the recovery. Total comprehensive income came in at Rs16.17 billion, against a comprehensive loss of Rs1.71 billion the year before.

Pakistan Refinery Profit

The numbers reshaped PRL's balance sheet almost overnight. Unappropriated profit flipped from an accumulated loss of Rs2.93 billion to a positive Rs13.24 billion. Total equity jumped to Rs42.77 billion from Rs26.60 billion. PRL also cut its borrowings rather than piling them on long-term debt fell to Rs9.15 billion from Rs12.35 billion, and short-term borrowings dropped sharply to Rs7.45 billion from Rs15.47 billion.

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But look at where the cash actually went. Trade and other payables jumped to Rs70.44 billion from Rs52.99 billion. Inventories surged to Rs32.01 billion from Rs22.03 billion. PRL leaned on suppliers to fund a bigger operational scale even as it repaired its own debt position a healthier balance sheet built partly on other people's patience.

Cash still shrank despite the record profit

Operating activities generated Rs15.91 billion in cash, a sharp turnaround from an outflow of Rs3.64 billion last year. Financing activities then consumed Rs11.17 billion not simply debt repayment, but the net result of several moving parts. PRL took in Rs21.06 billion in FE-25 loan proceeds and repaid Rs33.94 billion, a net outflow of roughly Rs12.88 billion on those import-financing loans alone. It also repaid Rs2.5 billion in long-term borrowings, drew Rs4.25 billion in fresh short-term borrowings, and settled smaller lease and dividend payments.

The upshot: cash and bank balances fell to Rs1.32 billion from Rs2.84 billion, even with a record profit on the books. A big year on paper still left the company holding less cash than it started with.

Investors wait. Again.

PRL last paid a dividend in FY2024 Rs2 per share, drawn from a profit base that has since run dry. Shareholders who sat through last year's Rs4.66 billion loss and this year's record rebound still haven't seen a rupee.

The board's caution isn't unreasonable finance costs alone still eat close to a sixth of operating profit, and shrinking borrowings suggests real deleveraging discipline. But two straight years without a dividend changes how shareholders read a "turnaround." A profit on paper and cash in hand aren't the same thing, and PRL's investors are increasingly being asked to tell the difference themselves.