Fauji Foods Posts 50% Drop in Losses In Q2 2021

Fauji Foods Limited (FFL), the company behind Nurpur milk, has announced its financial results for the second quarter (Q2-2021).

Fauji Foods has posted a loss of Rs. 410.86 million for the second quarter, showing a 50.40 percent decrease as compared to the preceding year. The company had reported a loss of Rs. 828.10 million in Q2 2020. Fauji Foods has been incurring losses since 2013.

The company managed to regain some of its lost market shares by registering a revenue growth of 36 percent from the corresponding quarter of last year despite a tougher business environment with high competition. During the quarter, the net sales of the company were reported at Rs. 2.11 billion, up by 36 percent as compared to Rs. 1.56 billion in the same quarter of 2020.

The company is witnessing a swing in its fate now, which is due to a change in leadership, new product launches, and an improving distribution network.

According to an analyst, the company posted a gross margin of 13.3 percent compared to a gross loss in the same period last year. Even on a quarter-on-quarter basis, the margins were improved by 2ppts.

The cost of revenue was reported at Rs. 1.83 billion as compared to Rs. 1.57 billion. Due to the increase in sales, the company managed to post gross profits of Rs. 281.59 million as compared to a gross loss of Rs. 9.01 million in the same quarter last year.

The recovery in revenue growth was marred by high input costs due to inflation.

The finance cost of the company decreased by 52.41 percent to Rs. 378.07 million as compared to Rs. 794.38 million in the same period last year. Marketing and distribution expenses were increased by 21 percent to Rs. 269.42 million as compared to Rs. 222.74 million.

FFL reported a loss per share of Rs. 0.51 as compared with Rs. 1.57 in the second quarter of 2021.

Half Year results

During the first half-year of 2021, FFL’s losses were reduced by 57.20 percent to Rs. 758 million as compared to Rs. 1.77 billion was recorded last year.

The company’s sales increased by 40 percent to Rs. 4.49 billion as compared to Rs. 3.22 billion in the same period last year. It reported a loss per share of Rs. 0.94 as compared to Rs. 3.37.

At the time of filing this report, FFL’s scrip at the bourse was trading at Rs. 19.90, down by Rs. 0.90 or 4.33 percent, with a turnover of 4.04 million shares on Wednesday.