Air Link Communication Limited (AIRLINK) has announced its strongest financial performance to date, reporting a record profit after tax of Rs. 4,748 million for the fiscal year 2025. This marks a modest increase of 3% compared to Rs. 4,625 million in FY24, reflecting the company’s ability to sustain earnings growth despite a challenging operating environment. Earnings per share for FY25 rose to Rs. 12.01, up from Rs. 11.70 in the previous year, underlining stable shareholder returns. The board also approved the highest-ever final dividend of Rs. 4.5 per share for the fourth quarter, bringing the total dividend payout to Rs. 7 per share, compared to Rs. 6 in FY24.
The company’s overall sales performance, however, showed strain as net sales fell to Rs. 104,379 million in FY25, representing a 20% decline from Rs. 129,742 million the prior year. This was largely due to reduced sales of locally manufactured mobile devices, which stood at 28.3 million units, down 13.1% year-on-year. Demand for smartphones remained under pressure, exacerbated by rising taxation and weakened affordability, which weighed heavily on consumer purchasing power. Analysts from Arif Habib Ltd highlighted that the contraction was in line with subdued market conditions and increasing cost burdens on the mobile device sector.
Despite lower top-line performance, Air Link managed to improve profitability through better operational efficiencies. Gross profit for FY25 rose to Rs. 11,015 million, up from Rs. 9,806 million last year. Gross margins also strengthened significantly, reaching 10.6% from 7.6% in FY24. In the final quarter, margins expanded even further to 14.1% compared to just 6.1% in the same period last year, indicating effective cost optimization strategies. The gains were attributed to tighter expense control and the successful integration of product-related finance costs into the company’s pricing structure, helping to preserve earnings despite reduced sales volumes.
Operational expenses continued to climb, with administrative and distribution costs reaching Rs. 1,102 million in FY25, compared to Rs. 993 million in FY24. Finance costs also rose sharply to Rs. 3,944 million from Rs. 2,974 million a year earlier, driven by higher short-term borrowings to finance greater inventory levels. Inventory surged to Rs. 18.9 billion in the fourth quarter, nearly double from Rs. 9.3 billion in the previous quarter, underscoring the company’s decision to build stock in anticipation of market recovery. Additionally, the effective tax rate increased to 23.5% from 17.4% in FY24, but net margins still improved to 4.5% compared to 3.6% last year.
Looking ahead, market analysts remain positive on the company’s growth outlook. Arif Habib Limited has maintained a ‘Buy’ recommendation on Air Link, setting a target price of Rs. 269 per share. Based on current levels, the stock is trading at a FY26 P/E ratio of 6.0x, suggesting considerable upside potential for investors. The latest results highlight Air Link’s resilience in balancing profitability with operational challenges, while continuing to reward shareholders with consistent dividends and a strong return profile.
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