Karachi: In a surprising turn of events, Air Link Communication (AIRLINK) has reported a remarkable 22% year-on-year increase in consolidated earnings per share (EPS) to Rs4.79 for the fourth quarter of the fiscal year 2025, significantly outperforming market forecasts.

This financial upswing, which brought the fiscal year 2025 earnings to Rs12.01 per share, a 3% improvement from the previous year, was primarily driven by strategic reclassifications in the company’s accounts. Administrative and other expenses were reallocated to the cost of sales, contributing to the unexpected financial results.

Despite these earnings, AIRLINK faced a substantial decline in net sales, which plummeted by 49% year-on-year and 33% quarter-on-quarter to Rs18.8 billion. This downturn was largely attributed to supply chain disruptions caused by regional conflicts, which negatively impacted sales volume.

The company, however, reported an enhancement in its gross margin, which rose to 14% in the fourth quarter from 10.4% in the previous quarter. This improvement was due to the reallocation of product finance costs, previously categorized under the cost of sales. Management noted that these adjustments were made following auditors’ recommendations.

Additionally, AIRLINK’s other income surged to Rs446 million, marking an 88% year-on-year increase. Meanwhile, the effective tax rate for the quarter dropped to 17% from 39% in the prior quarter, owing to deferred tax adjustments, with the full fiscal year averaging at 23%.

In light of these developments, the company declared a cash dividend of Rs4.5 per share for the fourth quarter, culminating in a total annual payout of Rs7 per share, equating to a 58% payout ratio compared to 51% in the previous fiscal year.

As investors await the detailed accounts for further analysis, the company maintains a strong market position, currently trading at an FY26/FY27 forecasted price-to-earnings ratio of 11.5/7.7 times, with a continued BUY recommendation from market analysts.