Khyber Tobacco’s Rebound Left the Cigarette Plant Idle

Khyber Tobacco used 16 percent of its Mardan cigarette plant in the year to June 30, 2025, as net sales rose to Rs 9,890.70 million. The listed company, incorporated on Oct. 15, 1954, booked a Rs 274.65 million profit after a Rs 1,021.997 million loss the year before.

Almost all of that rebound was redried and cut leaf sold abroad. The 9,288 million-stick line stayed mostly empty, and the next three quarters already show another small loss.

Khyber Tobacco’s Factory Still Runs Mostly Empty

Note 33 of the accounts keeps available cigarette capacity unchanged at 9,288 million sticks a year. Actual cigarette output of 1,522 million sticks in 2025, against 631 million in 2024, is a 891 million-stick rise that still fills only 16.4 percent of the plant. The 2024 rate was 6.8 percent.

Directors told shareholders production rose because of stronger market demand. The factory still occupies 279,844 square feet on Nowshera Road, Mardan, and still listed 460 factory staff at year end, unchanged from 2024, out of 575 people on the books.

PLANT USE IN TWO YEARS

• Rated capacity: 9,288 million cigarettes a year, with no change in the installed line.
• 2025 output: 1,522 million sticks, or 16.4 percent of that capacity.
• 2024 output: 631 million sticks, or 6.8 percent of capacity.
• Headcount at the line: 460 factory employees at June 30, 2025, the same count as a year earlier.

A plant that keeps its people and its square footage while running at 16.4 percent is not a closed factory. It is a cigarette business whose volume moved somewhere else.

Unmanufactured Tobacco Carried Almost All Export Revenue

Net sales of Rs 9,890.70 million were more than three times the Rs 3,113.76 million recorded in 2024, matching Chairman Rahat Ullah’s letter. Split the figure and the mix is plain. Local net sales rose to Rs 2,656.73 million from Rs 2,278.41 million. Export net sales jumped to Rs 7,233.97 million from Rs 835.35 million.

Of those exports, tobacco leaf brought in Rs 7,198.38 million, or 99.5 percent. Finished cigarettes brought in Rs 35.59 million, or 0.5 percent. The company’s own export page in the 70th annual report says unmanufactured tobacco dominated sales and that cigarette export “remain a minor segment,” with orders concentrated in markets such as the UAE and Greece.

WHERE THE 2025 EXPORT RUPEES WENT

• Asia: Rs 4,800.67 million, the bulk of the leaf book.
• Europe: Rs 1,314.89 million, a region that had no export line in the 2024 comparatives.
• Africa: Rs 770.17 million.
• North America: Rs 348.24 million.

Re-dried tobacco output rose to 9,733,836 kilograms from 5,512,983 kilograms. Cut tobacco output rose to 1,879,201 kilograms from 1,063,613 kilograms. Customs, clearance and freight on export climbed to Rs 156.14 million from Rs 50.21 million, which is the cost of actually moving that leaf.

Gross profit recovered to Rs 1,774.82 million from Rs 155.98 million, and operating profit was Rs 983.58 million after a Rs 467.94 million operating loss. Profit before tax was Rs 414.32 million after a Rs 1,018.09 million pretax loss. Other income was still only Rs 20.72 million, up from Rs 3.25 million. The board, meeting on Oct. 1, 2025 at the Mardan office, approved no cash dividend, no bonus shares and no rights issue.

The Company in the year under review contributed an amount of Rs. 9.64 Billion in the form of Federal Excise Duty, Sales tax, and other levies.

Rahat Ullah, Chairman, Khyber Tobacco Company Limited, 70th annual report

Ullah also wrote that the company was not experiencing liquidity issues and did not require external financing. Debt to equity still stood at 4.70 times, and inventory sat 374.47 days, which is more than a year of stock on the clock.

What the 2024 Wipeout Did to the Accounts

The year to June 30, 2024 is the hole the leaf book had to climb out of. Net sales fell 58.12 percent to Rs 3,113.76 million from Rs 7,434.55 million in 2023. The company posted a Rs 1,021.997 million loss after a Rs 1,998.40 million profit. Earnings per share flipped from Rs 288.68 to a loss of Rs 147.63. Gross margin collapsed from 37.28 percent to 5.01 percent, then only partly recovered to 17.94 percent in 2025.

THREE YEARS ON THE P&L

Directors’ 2024 report blamed a drop in foreign orders for Pakistani tobacco and said export work had narrowed to re-dried and cut leaf in the UAE, South Africa, Germany, Belgium, Turkey, Egypt and the Philippines. That is the same product mix that then exploded in 2025. The cigarette line never became the recovery engine. Leaf did.

Management has said since 2022 that it is fully on the Track & Trace System the government introduced for cigarette factories. In the 2025 directors’ report, Chief Executive Samera Irfan’s board repeated that Khyber Tobacco “ensured full compliance with the Track & Trace System,” and noted an SRO extending the scheme to other nicotine products. Compliance did not fill the Mardan belts.

Illicit Cigarettes Still Take About One Stick in Three

The Social Policy and Development Centre, in a March 2026 policy brief, put illicit trade at nearly 34 percent of Pakistani cigarette consumption after a 2025 survey of more than 6,600 smokers. SPDC’s working total is 53.55 billion sticks, of which 18.32 billion are illicit and 35.23 billion are legal. It prices the tax hole at Rs 115.6 billion (USD 411 million), almost all of it on economy brands.

SPDC splits the illicit pile as 39 percent made inside the country and 61 percent smuggled. Federal excise has sat at Rs 101 a pack on economy brands and Rs 330 on premium brands since February 2023, a freeze the centre says has made legal packs cheaper in real terms as inflation ate the specific duty.

WHERE ESTIMATES OF THE ILLEGAL MARKET DIVERGE

• SPDC, 2025 survey: Illicit share 34.2 percent of 53.55 billion sticks, with a Rs 115.6 billion duty and sales-tax loss.
• Tobacco-industry claims cited by SPDC: Illicit share around 56 to 58 percent, and losses of more than Rs 400 billion, on a much larger assumed market of about 82 billion sticks.

Those two pictures cannot both be right, and the gap is the fight Khyber Tobacco is stuck in. If SPDC is closer, a third of demand still sits outside the stamped, duty-paid channel the Mardan plant has to use. If the higher industry figures are closer, more than half the country is buying around that plant. Either way, a compliant line at 16.4 percent capacity is the result, not a mystery.

RTO Peshawar Sealed the Company’s Godowns

On Dec. 13, 2025, the Federal Board of Revenue’s spokesperson account said Regional Tax Office Peshawar had sealed Khyber Tobacco’s godowns the day before. The notice named the company’s brands as Kisan and GoldStreet and said legal proceedings under the Federal Excise Act, 2005 were underway.

After completion of codal formalities, godowns of M/s Khyber Tobacco Co. manufacturer of popular brands like Kisan & GoldStreet were sealed on 12 Dec, 2025 by RTO Peshawar. Legal proceedings under the Federal Excise Act, 2005 are currently underway.4/6 #LawEnforcement pic.twitter.com/AKQ7JWNV3G

— FBR (@FBRSpokesperson) December 13, 2025

That raid sat inside the quarter ended Dec. 31, 2025. On the Pakistan Stock Exchange tape, Q2 FY2026 shows net sales of Rs 3,104.07 million and a loss after tax of Rs 584.66 million, or Rs 84.46 a share. Q1 had been a thin Rs 36.97 million profit on Rs 1,581.64 million of sales. Q3, to March 31, 2026, came back with Rs 2,716.90 million of sales and Rs 475.11 million of profit, still below the Rs 3,963.40 million sales and Rs 552.32 million profit of Q3 FY2025.

Add the three FY2026 quarters and nine-month sales are Rs 7,402.61 million with a Rs 72.58 million loss after tax. The company has not yet published accounts for the year ended June 30, 2026. The FBR post did not name a finding, a fine, or a close of the case, and no later official notice in the material at hand says those proceedings ended.

One Name Owns 64 Percent of KHTC

The 2025 share register is not a widely held float in the way a 94.28 percent “local general public” line first reads. Mr. Waseem-ur-Rahman held 4,453,630 of 6,922,604 shares on June 30, 2025, or 64.33 percent. He is listed as a shareholder holding 5 percent or more, not as a director. Directors, the chief executive, and their families together hold tens of thousands of shares: Khalil ur Rehman 14,400, Pir Waris Shah 14,400, Zia ur Rahman 7,200, Rahat Ullah 3,600, Samera Irfan 3,060, and two independent directors 2,500 each.

THE JUNE 30, 2025 REGISTER

• Controlling name: Waseem-ur-Rahman, 4,453,630 shares, 64.33 percent, inside the local public bucket.
• Insurance companies: 239,820 shares, 3.46 percent.
• Directors and CEO: well under 1 percent combined, with Samera Irfan on 3,060 shares.
• Exchange free float: 14.41 percent, or 997,245 of 6,922,368 shares on the PSX profile.

Insurance’s 3.46 percent matches the older mid-2023 snapshot. The “public” line does not. A 64.33 percent holder classified as general public is why a 91 percent public figure from 2023 and a 94.28 percent local-public figure in 2025 can both appear on paper while one man still carries the equity risk.

PSX data show KHTC closed at Rs 291.08 on Sept. 24, 2026, down 1.16 percent on the day, with a 52-week range of Rs 246.10 to Rs 532.00. The one-year change was minus 38.38 percent. Volume was 746 shares. Market value at that print was Rs 2,014.96 million. Trailing P/E is listed as not available.

The KT&G Notice Did Not Survive the Morning

On July 6, 2026, Khyber Tobacco filed a memorandum of understanding with KT&G Corporation of the Republic of Korea. The notice said the MoU granted a royalty licence for KT&G’s cigarette brand Pine Passion Sky, with a later definitive agreement meant to let Khyber Tobacco make or market the brand in Pakistan and in other agreed territories, subject to approvals. The same filing was marked revoked that morning.

WHAT WE KNOW

• The FY2025 rebound: Net sales Rs 9,890.70 million and profit Rs 274.65 million, driven by leaf exports, not by filling the cigarette plant.
• The raid notice: RTO Peshawar sealed company godowns on Dec. 12, 2025, and FBR said Federal Excise Act proceedings were underway.
• The register: Waseem-ur-Rahman holds 64.33 percent; exchange free float is 14.41 percent.

WHAT IS UNCONFIRMED

• The Korean brand: Whether any licence for Pine Passion Sky survived the revoked July 6 notice.
• The excise case: Whether the December 2025 sealing produced a penalty, a release, or a still-open file.
• The FY2026 year: Full audited results for the year to June 30, 2026 have not been posted on the exchange page.

Ullah’s October 2025 outlook was that cigarette and tobacco sales in local and foreign markets would rise and that next year’s results would show a “visible improvement.” Nine months of FY2026 already show a Rs 72.58 million loss. On Sept. 24, 2026, the stock sat at Rs 291.08, less than half the 52-week high of Rs 532.00, on 746 shares of volume, with a cigarette plant that last published a 16.4 percent use rate.

Disclaimer: This article is news reporting and analysis of Khyber Tobacco Company Limited’s published accounts, exchange filings, and official notices. It is informational only and is not investment advice, a solicitation to buy or sell KHTC or any other security, or a recommendation on tobacco or tax policy. Readers who may act on company or sector information should consult a licensed financial adviser or broker familiar with Pakistan Stock Exchange listings and with the legal status of any pending Federal Board of Revenue matter. Figures, share prices, case statuses, and corporate notices reflect the cited documents and market data as dated in those sources and can change with later filings.