AIRLINK saw a 22% YoY growth in consolidated earnings to Rs 4.79/share in 4QFY25

Air Link Communication (AIRLINK) reported a 22% YoY growth in consolidated earnings to Rs 4.79/share in 4QFY25. This takes FY25 earnings to Rs12.01/share, up 3% YoY, according to Topline Pakistan Research. Reversals in administrative and other expenses primarily drove this higher-than-expected result, as certain items previously recorded under this head were reclassified as cost of sales, based on our channel checks.

The company posted net sales of Rs18.8bn in 4QFY25, down 49% YoY and 33% QoQ. This decline stemmed from supply chain disruptions caused by regional conflicts, which negatively impacted sales volumes.

AIRLINK’s gross margin improved to 14% in 4QFY25 from 10.4% in 3QFY25. The sequential improvement in GP margins is due to the reallocation of product finance costs, which were previously booked under cost of sales. According to management, the final year accounts underwent these changes at the auditors’ advice.

We await the release of detailed accounts to ascertain all the changes made and gain further clarity.

Other income for the quarter clocked in at Rs446mn, up 88% YoY and 4.8x QoQ.

The Effective Tax Rate (ETR) during 4QFY25 stood at 17% (compared to 39% in 3QFY25), primarily due to deferred tax adjustments. FY25 tax rate averaged at 23% (FY24: 17%).

The company also announced a cash dividend of Rs 4.50/share in 4QFY25, bringing the full-year payout to Rs 7/share, equivalent to a 58% payout (vs. 51% in FY24).

We maintain our BUY stance on Airlink. The company is currently trading at an FY26/FY27F PE of 11.5/7.7x.