Fauji Foods Limited (PSX: FFL) has posted a Rs. 38.6 million profit for the quarter that ended on September 30, calendar year 2023, compared to a loss of Rs. 690 million in the same period last year.
For 9MCY23, the company reduced its loss after tax to Rs. 108.7 million compared to a loss of Rs. 1.94 billion recorded in SPLY. The company did not announce any bonus shares or cash dividends for the period in review.
According to FFL’s financial results, it registered a net revenue growth of 83 percent to Rs. 14.7 billion during 9MCY23 from Rs. 8 billion in 9MCY22. In Q3, revenue clocked in at Rs. 4.9 billion compared to Rs. 3.2 billion in SPLY.
Deputy Head of Research at JS Global Waqas Ghani told ProPakistani, “Fauji Food Limited (FFL) reported favorable financial performance today, driven by increased revenue growth, sustained profit margins, and a decrease in financial expenses resulting from debt repayment. This marks the company’s second consecutive quarter of positive earnings”.
In a brief commentary, FFL explained that Nurpur continues to drive growth (+45 percent over SPLY). The successful marketing campaign and route-to-market revamp remain the main drivers.
The commercial sustainability is reflected through an improved structure of the P&L as Gross Margins increased from 3.5 percent in 9 months of 2022 to 12.3 percent in 9 months of 2023. This was driven by continued focus on cost efficiencies backed by twin sustainability projects of 1 MW solar and biomass which went into production in Q1 and are expected to positively impact energy cost in 2023.
These initiatives along with price increases and other planned cost optimizations yielded an additional 8.8 percent Gross Margin. As a result, FFL achieved a 9-month operating profit of Rs. 258 million versus Rs. 1.07 billion loss in SPLY, an increase of Rs. 1.33 billion.
During the quarter, the finance cost of the company shrunk by 98 percent to Rs. 6 million as compared to Rs. 343.9 million in the same period last year. In 9MCY23, the same metric saw a decrease of 62.4 percent to Rs. 341.4 million.
FFL’s marketing and distribution expenses decreased by 5.6 percent to Rs. 331.5 million in Q3, while the same expenses saw a 0.15 percent decrease to Rs. 1 billion in January-September 2023.
Administrative expenses jumped to Rs. 187.6 million during Q3 and Rs. 531.8 million in 9MCY23. The company’s other income increased to Rs. 62.6 million in Q3 and from Rs. 137.7 million to Rs. 189.3 million in 9MCY23.
FFL reported a loss per share of Rs. 0.05 for the nine months and earnings of Rs. 0.02 per share for 3QCY23.
The company’s scrip at the bourse closed at Rs. 6.73, up by 1.2 percent or Rs. 0.08, with a turnover of 19.2 million shares on Monday.
