Octopus Digital Faces Sharp Profit Drop in Q1 2025

Octopus Digital Limited (PSX: OCTOPUS) has reported a significant decline in its financial performance for the first quarter ending March 31, 2025.

According to the company’s unaudited consolidated statement of profit or loss, the net profit dropped by 84.85% year-on-year, falling to Rs18.74 million from Rs123.7 million in the same quarter of the previous year.

The company’s operating expenses further strained profitability. Administrative and selling expenses increased sharply by 34.97%, amounting to Rs94.73 million, while other expenses dropped considerably by 83.22%, totaling just Rs50,000, providing slight relief.

Interestingly, other income saw a massive boost, rising over 30 times to Rs21.82 million, compared to a modest Rs0.7 million in the same period last year. This unexpected rise helped mitigate some of the pressure from the growing expenses.

Decline in Operating and Pre-Tax Profits

Despite the support from other income, profit from operations plummeted by 77.82%, settling at Rs 29.89 million. The situation was worsened by a significant rise in finance costs, which jumped to Rs9.22 million, up from just Rs76,000 a year ago.

As a result, profit before tax dropped to Rs 20.67 million, reflecting an 84.65% decline. After accounting for taxation of Rs1.92 million, the net profit stood at Rs18.74 million for the quarter.

Earnings Per Share Drop

Both basic and diluted Earnings per Share (EPS) saw steep declines:

• Basic EPS dropped to Rs 0.13 from Rs 0.84
• Diluted EPS fell to Rs 0.13 from Rs 0.83

Q1 2025 Financial Summary

Category	Q1 2025 (Rs ‘000)	Q1 2024 (Rs ‘000)	% Change
Revenues	231,458	313,859	-26.25%
Cost of Revenue	(128,611)	(109,349)	+17.62%
Gross Profit	102,846	204,511	-49.71%
Admin & Selling Expenses	(94,729)	(70,185)	+34.97%
Other Expenses	(50)	(298)	-83.22%
Other Income	21,818	697	+3030.27%
Profit from Operations	29,886	134,725	-77.82%
Finance Costs	(9,219)	(76)	N/A
Profit Before Tax	20,667	134,649	-84.65%
Taxation	(1,924)	(10,951)	-82.43%
Net Profit After Tax	18,743	123,697	-84.85%
Basic Earnings Per Share (Rs)	0.13	0.84	-84.52%
Diluted Earnings Per Share (Rs)	0.13	0.83	-84.34%