Dewan Group Companies Present Mixed Performance Amid Operational Challenges and Restructuring Efforts -

PAKISTAN

The Dewan Group of Companies shared the performance updates of its listed entities — Dewan Automotive Engineering Limited, Dewan Cement Limited, Dewan Farooque Spinning Mills Limited, and Dewan Salman Fibre Limited — following their respective Annual General Meetings for the financial year ended June 30, 2025. The Group continues to navigate operational challenges, working capital constraints, and restructuring efforts while maintaining its commitment to reviving industrial operations across its key business segments.

Dewan Automotive Engineering Limited (DAEL)
During the year under review, the Company remained constrained by a lack of working capital, preventing the resumption of full-scale operations despite renewed vehicle manufacturing activities by a sister concern — previously one of its major customers.
The Chairman informed shareholders that once the required capital is arranged, the Company will restart production and sales. The Company has settled its liabilities with all financial institutions and expects to secure new working capital lines shortly.
Auditors have issued a qualified opinion, citing uncertainty under the “basis of adverse opinion” due to halted operations; however, management has prepared the financial statements on a going concern basis, expressing confidence that normal business activity will resume once funding is secured.

Dewan Cement Limited (DCL)
Despite a 4% decline in net sales revenue due to periodic plant maintenance and higher government duties, Dewan Cement achieved a notable turnaround in profitability.
The Company’s gross profit margin improved to 7% from 2% in the previous year, reflecting enhanced cost controls and operational efficiency. DCL reported a profit before levies and taxes of Rs. 351 million, compared to a loss of Rs. 611 million last year. However, the Company posted a loss after tax of Rs. 967 million, primarily due to a deferred taxation provision of Rs. 953 million.
The Company’s cement dispatches declined by 9.4%, from 1.58 million tons to 1.43 million tons, amid market contraction.
Significantly, DCL commissioned a 6 MW solar power project, reducing operational costs and reinforcing sustainability commitments.
Auditors qualified their report regarding the classification of Advance for Pre-IPO investment (Rs. 2.91 billion) and non-provisioning of markup (Rs. 794.55 million); management clarified that restructuring negotiations with lenders are in advanced stages and that the financials were prepared on a going concern basis given improving cash flows and cost efficiency.

Dewan Farooque Spinning Mills Limited (DFSM)
The Company reported a net revenue decline to Rs. 219.25 million (2024: Rs. 446.38 million) and a gross loss of Rs. 239.68 million, reflecting ongoing working capital constraints.
Despite challenges, DFSM made strategic investments in technology, replacing outdated ring-spinning machinery with Auto Coro Spinning systems to improve efficiency, productivity, and product quality. Further modernization and capacity expansion are planned once financial stability is restored.
The Company continues to operate on a contract basis to maintain minimal production activity. Management is engaged in restructuring negotiations with lenders to revise terms without markup.
Auditors expressed a qualified opinion, citing defaults in repayment and uncertainty over the going concern assumption; however, management remains confident of a favorable outcome, with sponsors continuing to support working capital needs.

Dewan Salman Fibre Limited (DSFL)
Dewan Salman Fibre — once Pakistan’s largest polyester and only acrylic fibre producer — remained non-operational during the fiscal year, recording no turnover and a gross loss of Rs. 283.05 million (2024: Rs. 411.88 million), mainly due to fixed costs and depreciation.
Management reiterated efforts to restart operations and highlighted the adverse economic impact of relying on imported polyester and acrylic fibre, which drains foreign exchange and reduces domestic employment opportunities.
The Company continues to pursue restructuring proposals with financial institutions, although progress has been limited.
Auditors expressed an adverse opinion, questioning the use of the going concern assumption and the non-provisioning of markup; management defended its stance, expressing confidence that negotiations for debt restructuring and markup waivers will conclude positively.

Group Outlook
Despite ongoing financial and operational challenges, the Dewan Group remains optimistic about its revival strategy, backed by restructuring efforts, improved cost management, and investments in renewable energy and technology upgrades. The Group aims to gradually restore operations across its industrial portfolio, contributing to employment generation and domestic industrial capacity in the coming years.