Fauji Foods Limited (FFL), the maker of Nurpur milk and Dostea, has announced its financial results for the first quarter that ended on March 31, 2020.
The company has been incurring losses since 2013 and the start of 2020 didn’t bring any luck either. During the first quarter, Fauji Foods reported a significant loss of Rs. 952.16 million, increasing by 36.30% as compared with a loss of Rs. 698.63 million recorded in the same period last year, due to higher costs and an increase in finance cost.
However, sales landed at Rs. 1.66 billion, translating into a 20.30% increase as compared with Rs. 1.38 billion recorded in the same period last year. Analysts believe that this was an outcome of panic buying due to the lockdown in the country.
The cost of sales saw a massive jump of 31.34% to Rs. 1.76 billion as compared with Rs. 1.35 billion the corresponding period of the last year. This caused the company to post a gross loss of Rs. 100.32 million versus a gross profit of Rs. 30.52 million during the same period in 2019.
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Fierce competition in the food segment and a decline in market share is creating problems for the company. FFL got affected by the consumer’s ability and willingness to spend which was negatively impacted due to inflation, weakening of the currency and high-interest rates.
However, other income of the company saw an increase of Rs. 19.51 million, up by 123.50% as compared with Rs. 8.73 million recorded in the previous year.
The finance cost saw a massive increase as it soared by 82.42% to Rs. 561.27 million during the quarter as compared with Rs. 307.68 million in the same period of 2019.
The company reported a loss per share of Rs. 1.80 as compared with Rs. 1.32.
FFL’s product portfolio includes flavoured milk, cheese, butter and UHT milk under the brand name ‘Nurpur’ while other products include fruit drinks and tea whitener.
Ever compared the price of Fauji corn flakes with those of (imported) Kelloggs? There isn’t much difference. Tells you a lot about pricing strategy of this entity. The loss should come as no surprise.
Fauji Foundation is the hard generated funds from graded commodities as Barley, Wheat, milk, dairy products, corn flakes, with very high premium, value added in packaging, printing, as TetraPak, UHT milk, Corn Flakes, cheeses, butter, Wheat Flakes etc. The Swiss plant for Barley processing for porridge quality, and all products are excellent. There is no need to Fauji to spend resources the hard sweat labour for advertising, PR, marketing, road shows, high packaging proprietary TetraPak, UHT, the boxes of high grammage box for corn flakes, and Corn Flakes, launching, promotion, PR, Dancing, Halla Gulla, to please the Advertising, Marketing show.
The company products are respectable brands, quality, vision, image, projections, consumer behaviour respect, honor, loyalty etc., should be reflected in slashing prices by reducing the PR, Marketing, Advertising, Road Shows, out sourcing, all drain the resources. The company matured senior staff can do it best by the grace of Allah. best Wishes
Fauji bhayio ab CPEC se loot ke khao is mulk ke wasail ko. Wahan trillions rupees ki corruption ke moqa tumhain mil chuka hai. Ye losses choti choti cheezen hain inn ka gham na karo.