FFL's impressive top line growth shrinks losses by 66%

April 20, 2023 (MLN): Fauji Foods Limited (PSX: FFL) posted net losses of Rs1.69 billion [LPS: 0.07] in 1QCY23, 66% lower than the losses of Rs4.99bn [LPS: Rs0.32] during the same period in the previous calendar year.

As per the financial statement revealed by the company today, FFL achieved 2.16x YoY larger growth in net revenue for 1QCY23, worth Rs5.16bn as compared to Rs2.38bn in the same period last year, which helped lower the losses of the company by a significant margin.

This growth was driven by a 54% YoY volume growth in UHT Milk, and stronger institutional sales worth Rs2.03bn in 1QCY23.

The tremendous increase in top-line helped the company generate a 4.33x larger gross profit, despite the rise in the cost of revenue. Almost doubling gross margins in the review period.

With regard to operating expenses, FFL’s marketing and distribution expenses increased by 8.3% YoY owing to an increase in distribution by 13,000 outlets. While Administrative expenses surged by 68.2% YoY.

Inflationary pressure on the back of devaluation, and macroeconomic uncertainty resulted in a 28.9% YoY increase in finance costs.

Notably, FFL paid off its entire debt worth RS8bn after completing the other than-right equity injection during the period.

On the tax front, the company paid Rs66.36 million in 1QCY23, as compared to Rs30.69m in the same period last year, which is a significant increase of 2.16x YoY.

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