Pacific Textiles reports profit decline, cuts dividend amid tariff impact

Pacific Textiles Holdings Limited announced a 25.8% decrease in profit attributable to equity holders, reaching HK$79.3m for the six months ended September 30, 2025, down from HK$106.9m in the prior year. Revenue also fell by 6.7% to HK$2,524.5m, due to a 10.5% decrease in sales volume. This downturn was largely attributed to a drastic fall in sales orders between April and June 2025, following a substantial increase in US import tariffs on goods from Vietnam, alongside higher fixed cost absorption from lower production facility utilization.

Despite the reduced profit, the board declared an interim dividend of HK$0.05 per share for the six-month period, a decrease from HK$0.07 per share in the corresponding period of 2024. This dividend will be paid on December 30, 2025. The company also repurchased 2,000,000 shares for an aggregate consideration of HK$3,000,000 during the period, which were subsequently cancelled.

Management noted that the impact of US tariffs was moderated after the rate was reduced to 20% from an initial 46%, leading to a recovery in sales order levels. Production facility utilization rates in Vietnam have rebounded to approximately 80%-90%. Total assets as of September 30, 2025, increased to HK$5,622.1m, but the group moved into a net debt position of HK$973.8m, up from HK$679.8m as of March 31, 2025, primarily due to increased trade receivables and inventories.