Zuma Resources Limited (ZUMA) has reported a dramatic reversal in its financial fortunes for the year ended June 30, 2025. The company swung from a net profit of PKR 41.18 million in the previous year to a significant net loss of PKR 2.44 million. This sharp downturn is primarily attributable to a complete absence of operational sales for the second consecutive year and a staggering increase in finance costs. In light of these challenging results, the Board of Directors has not recommended any dividend for shareholders, signaling a critical period for ZUMA.
Deteriorating Financial Performance
The most concerning aspect of ZUMA's latest financial report is the continued lack of net sales for fiscal year 2025, mirroring the prior year's performance. This indicates a prolonged halt in the company's core business operations. Despite this, ZUMA recorded 'Other Income' of PKR 41.61 million, though this represents a notable decrease from PKR 53.84 million in 2024. With no operational revenue, the company's expenses directly eroded its financial position. Administrative expenses surged from PKR 0.87 million to PKR 3.92 million, but the most significant impact came from finance costs, which skyrocketed by over 360% from PKR 8.65 million to PKR 40.13 million.
This confluence of factors led to an operating loss of PKR 2.44 million for 2025, a stark contrast to the operating profit of PKR 44.32 million reported in the previous year. Consequently, shareholders faced a loss per share of PKR 0.17, reversing the profit per share of PKR 2.92 seen in 2024. The company's balance sheet reflects these challenges, with accumulated losses expanding to PKR 149.80 million. Furthermore, deferred liabilities have significantly increased from PKR 273.73 million to PKR 383.81 million, indicating growing long-term obligations.
Cash Flow Dynamics and Strategic Asset Divestment
Cash flow from operating activities remained negative, utilizing PKR 0.43 million, a slight improvement from the PKR 0.66 million used in 2024. However, the company generated a substantial PKR 150.20 million from investing activities, primarily driven by an 'Advance against sale of asset'. This significant inflow appears to be a strategic move towards asset monetization.
A large portion of this capital was deployed in financing activities, which consumed PKR 149.48 million. This was mainly directed towards deleveraging the company, with substantial repayments made on long-term bank loans (PKR 110.20 million) and loans from directors (PKR 40 million). Interestingly, despite a reduction in long-term bank financing from PKR 170.84 million to PKR 137.45 million, finance costs have dramatically increased, suggesting higher interest rates on remaining debt or other short-term financing not detailed in the summary.
ZUMA continues to hold a 'Non current asset held for sale' valued at PKR 600 million, a figure unchanged from the previous year. The successful divestment of this asset is crucial and could significantly alter the company's financial position and strategic direction.
Investor Outlook: High Risk, Uncertain Future
Zuma Resources is at a critical juncture. The persistent absence of operational sales for two consecutive years, coupled with escalating finance costs, paints a grim picture for its core business viability. Investors should exercise extreme caution. The company's immediate future appears to be heavily reliant on the successful sale of its PKR 600 million 'Non current asset held for sale' and the subsequent deployment of those proceeds.
Key areas for investors to closely monitor include any announcements regarding the asset sale, management's concrete plans for re-establishing a revenue-generating business, and effective strategies to control the burgeoning finance costs. Without a clear and viable path to operational profitability, ZUMA remains a high-risk proposition, with no dividend prospects in sight for the foreseeable future.