Company Name: Arpak International Investments Limited
Ticker: ARPAK
Arpak International Investments Limited is a small listed holding and investment company, not an operating manufacturer. Direct income comes mainly from rent, markup on an associated-company loan, bank profit and short-term investments. Reported profit, however, is usually dominated by equity-accounted associate results and investment valuation movements. That gap between a modest cash-generating core and large accounting swings is the central fact readers need to understand.
For the nine months ended March 31, 2026, ARPAK's loss after tax narrowed to PKR 71.65 million from PKR 98.48 million, although direct income slipped and the operating loss widened. The main reason was a smaller share of an associate's losses. The impairment reversal was also much smaller. These non-cash movements should not be confused with rent collected or cash generated. The figures and basis come from ARPAK's official nine-month report and PSX results filing.
Reported facts below come from audited accounts, interim accounts and official company or PSX material. Intended renovations, leasing and project decisions are identified as management statements. Explanations of economic meaning are AlphaGen analysis, not company forecasts or investment advice.
What the company owns and how it makes money
ARPAK was incorporated on July 26, 1977 and is listed on the Pakistan Stock Exchange. Its principal activity is investment business in various forms. The PSX profile places it in the miscellaneous sector, while the company profile identifies its Islamabad office and investment mandate. There is no large production or distribution operation; the audited report recorded only five employees at June 30, 2025.
The economics have three layers. First is direct recurring income: property rent, markup on a related-party loan, bank profit and liquid-investment returns. Second is the value and occupancy of two properties. Third is exposure to associated companies. Equity accounting recognizes ARPAK's share of an associate's profit or loss even when no dividend is received; impairment charges or reversals can then alter the carrying value again.
Rental properties
ARPAK owns investment property in Gulberg V, Lahore and F-7/1, Islamabad: land measuring 918.56 and 1,600 square yards respectively. Both generated rent in FY2025. Rental income was PKR 7.44 million, down from PKR 9.65 million, while direct property costs were PKR 0.28 million and depreciation PKR 0.18 million, according to the FY2025 audited annual report.
The properties are carried under the cost model at only PKR 8.60 million, but management's June 2025 assessment put their combined fair value at PKR 780 million: PKR 150 million for Lahore and PKR 630 million for Islamabad. That estimate is neither rental income nor cash. It nevertheless explains why historical book value may not represent management's view of the real-estate base. Occupancy, rent, renovation cost and independent valuation updates matter more than a headline estimate alone.
In March 2026 management said vacant property might be renovated and re-let at competitive rates. This is an intention, not evidence that a tenant or higher rent has been secured. Renovation could require cash before producing income.
Loan and treasury income
ARPAK had a PKR 25 million loan to Chashma Sugar Mills Limited. The March 2026 report states it earns one-month KIBOR plus 1.25%, with effective rates of 12.04%–12.64%. Repayment is due in seven equal half-yearly instalments beginning November 2028, supported by a PKR 60 million promissory note. The loan provides rate-sensitive income but delays principal recovery and concentrates credit exposure inside the group.
FY2025 loan markup contributed PKR 4.12 million, down from PKR 6.51 million. Bank-deposit profit was PKR 0.15 million and short-term investment dividends PKR 0.07 million, versus PKR 4.13 million a year earlier. These small lines matter because corporate costs are relatively fixed. Lower rates reduce interest income unless balances or other income offset the decline.
The associates that drive earnings
Premier Sugar Mills & Distillery
The largest and most volatile exposure is Premier Sugar Mills & Distillery Company Limited, or PSM. ARPAK owns 400,000 quoted shares, or 10.67%. PSM makes white sugar and spirit, so ARPAK is indirectly exposed to sugarcane cost and availability, sugar and alcohol prices, utilization, energy, regulation and working capital. ARPAK does not control those operations, but their results flow through its accounts.
At June 30, 2025, the gross equity-accounted PSM interest was PKR 693.48 million before a PKR 583.42 million cumulative impairment allowance, leaving PKR 110.06 million net. The impairment assessment used PSM's quoted closing price of PKR 275.16. Market-value changes can therefore produce large charges or reversals without bringing cash to ARPAK.
In FY2025 ARPAK recognized a PKR 333.12 million share of associate losses, versus PKR 19.80 million profit in FY2024. It also recognized a PKR 211.77 million PSM impairment reversal, versus a PKR 273.37 million impairment charge a year earlier. The reversal partly offset the associate loss. The lines must be read together: one reflects investee results, the other recoverability of the investment's carrying amount.
Premier Board Mills
ARPAK owns 600,000 unquoted shares, or 10.63%, of Premier Board Mills Limited. Its FY2025 carrying value was PKR 88.70 million. The audited accounts reported the associate's net assets at PKR 834.47 million and profit after tax at PKR 80.07 million for the relevant year. Unlike PSM, it has no quoted price.
The March 2026 report says this carrying value was not updated under IAS 28 because interim financial information was unavailable. A flat value therefore does not prove the investee's economics were unchanged; it may reflect missing current information.
Premier Grain Ethanol
ARPAK invested PKR 32 million in Premier Grain Ethanol Limited, an unquoted export-oriented grain-ethanol project. An original PKR 50 million authorization was cut by cancelling the remaining PKR 18 million. Management cited global trade, regulation, domestic volatility and corn-price considerations. The March 2026 report says the boards decided not to continue and an impairment adjustment was intended in FY2026.
This remains an accounting risk. Until the adjustment is recorded and audited, the PKR 32 million carrying amount should not be assumed fully recoverable. The statement warns of a future action but does not quantify the final charge.
Revenue, costs and cash conversion
FY2025 direct income fell 46.1% to PKR 11.78 million from PKR 21.87 million. Rental and loan-markup income declined and the prior year's larger fund dividend did not recur. Operating expenses were broadly stable at PKR 15.30 million versus PKR 15.06 million. Direct operations therefore moved to a PKR 3.52 million loss from a PKR 6.81 million profit before associates, impairment and tax.
After those items, FY2025 loss after tax was PKR 125.25 million, or PKR 31.31 per share, versus PKR 249.56 million and PKR 62.39 per share in FY2024. No dividend was recommended because of the loss. Audited statements are available through the official annual-report archive.
FY2025 operations used PKR 13.74 million of cash. Investing activities generated PKR 12.73 million, largely because PKR 12.68 million of loan markup was received; cash fell to PKR 1.47 million. Equity-accounted results and impairments do not themselves produce cash. AlphaGen inference: the cash-flow statement is often a better near-term flexibility test than headline earnings.
For nine-month FY2026, direct income fell 4.9% to PKR 8.46 million, operating expenses rose slightly to PKR 11.90 million and operating loss widened to PKR 3.45 million. Associate loss narrowed to PKR 129.58 million from PKR 279.91 million, while impairment reversal fell to PKR 61.08 million from PKR 184.34 million. After-tax loss narrowed 27.3% to PKR 71.65 million, but not because direct operations strengthened.
Operating cash outflow for the nine months was PKR 5.46 million, versus PKR 11.98 million. Markup receipts of PKR 5.50 million largely offset it, leaving cash at PKR 1.51 million. Rental collections, expenses and related-party receipts therefore matter disproportionately.
Balance sheet and asset quality
At March 31, 2026, assets were PKR 312.52 million and equity PKR 305.81 million. Long-term investments were PKR 272.85 million, the associate loan PKR 25 million, investment property PKR 8.47 million and bank balances PKR 1.51 million. Current liabilities were PKR 6.49 million. Conventional leverage was low, but most assets were neither cash nor controllable operating assets.
Low debt is a strength because finance cost is not the main pressure. The trade-off is concentration and illiquidity. At June 2025 equity included PKR 698.30 million of ARPAK's share in associates' revaluation surplus, while accumulated losses were PKR 484.48 million. A large equity balance therefore does not automatically mean dividend capacity or cash for new investment.
Competitive position and operating environment
ARPAK does not compete for market share like a producer. Its position depends on investment access, stewardship of two urban properties, counterparty quality and associates. A small overhead platform and low liabilities help; narrow recurring income, related-party concentration, thin liquidity, reliance on investee reporting and valuation sensitivity are weaknesses.
A favorable environment would combine better PSM results and quoted value, timely Premier Board Mills information and profit, reliable loan collections, attractive short-term rates and higher property occupancy. An adverse environment would bring associate losses, impairments, rate cuts, vacancy, renovation overruns or a write-down of Premier Grain Ethanol.
FX and commodity exposure are mostly indirect. FY2025 accounts reported no direct foreign-currency financial assets or liabilities, but PSM's sugar and spirit operations and the proposed ethanol venture face commodity, trade, regulatory and currency-linked input risks. Not every ARPAK earnings movement originates in its own office.
Growth avenues and risks
The clearest growth route is improving cash yield from existing assets: re-letting property, renovating only where expected rent supports cost, collecting loan markup and eventually recovering principal. A PSM turnaround or stronger Premier Board Mills profit could improve accounting earnings and, if dividends follow, cash income. New investments could diversify results but could also add another concentrated, hard-to-value exposure.
Key risks are further impairment; continuing associate losses; delayed information from unquoted associates; related-party credit concentration; a small cash reserve; vacancy; and corporate costs exceeding rent and interest. Governance and disclosure matter because minority investors depend on ARPAK and its associates to explain connected-party transactions, valuations and project decisions.
Key facts and figures
- Incorporated July 26, 1977; principal activity: investment business.
- Employees: 5 at June 30, 2025.
- FY2025 direct income: PKR 11.78 million; rent: PKR 7.44 million.
- FY2025 associate-loan markup: PKR 4.12 million.
- FY2025 operating loss before associates and impairment: PKR 3.52 million.
- FY2025 after-tax loss: PKR 125.25 million; loss per share: PKR 31.31.
- Nine-month FY2026 income: PKR 8.46 million; after-tax loss: PKR 71.65 million.
- March 2026 assets: PKR 312.52 million; equity: PKR 305.81 million.
- March 2026 long-term investments: PKR 272.85 million; bank balance: PKR 1.51 million.
- Associate loan: PKR 25 million at one-month KIBOR plus 1.25%.
- PSM holding: 10.67%; FY2025 net carrying amount: PKR 110.06 million.
- Premier Board Mills holding: 10.63%; FY2025 carrying amount: PKR 88.70 million.
- Premier Grain Ethanol investment: PKR 32 million; management flagged FY2026 impairment.
- Properties: PKR 8.60 million book value versus management-assessed PKR 780 million fair value at June 2025.
How to read this company's results
First compare direct income with operating expenses. This shows whether rent, markup and treasury income cover the listed company's costs before investee volatility.
Next separate the share of associate profit or loss from impairment charges and reversals. One reflects allocated investee results; the other changes carrying value using recoverability evidence. Neither necessarily brings cash.
Then reconcile profit with cash flow. Compare markup recognized and received, inspect bank balances, and distinguish retained earnings from revaluation surplus. For PSM, monitor operations, price and impairment headroom; for Premier Board Mills, information timeliness; for Premier Grain Ethanol, the final impairment; and for the Chashma Sugar Mills loan, collections and the 2028 repayment schedule.