April 30, 2024 (MLN): National Foods Limited (PSX: NATF) recorded a decrease of 46.5% YoY in its profits, with the company's after-tax profits falling to Rs759.88 million [EPS: Rs3.26], compared to a profit of Rs1.42 billion [EPS: Rs6.1] in the same period last year (SPLY).
Going by the results, the company's revenue grew 30.3% YoY to Rs12.92bn as compared to Rs9.92bn in SPLY. This growth was led both by the domestic and international markets.
The cost of sales rose by 40.7% YoY but was lesser than proportionate to sales rise, which improved the gross profit by 12.1% YoY to Rs4.06bn in Q1 2024.
The gross margins, however, worsened to 31.42% as compared to 36.51% in SPLY.
High inflationary pressure impacted gross profitability and volumes of the consumer business.
The company has taken revenue and cost transformation measures to offset some of the inflationary pressures.
Increased investments in international division to enable future growth has impeded operating profitability.
On the expense side, the company's administrative expenses rose 9.2% YoY to Rs487.26m, selling and distribution expenses rose 16.1% YoY to Rs1.84bn, and other operating expenses fell 16.1% YoY to Rs81.63m.
The company’s finance cost surged by 2.5x YoY and stood at Rs469.86m as compared to Rs184.7m in SPLY, mainly due to higher interest rates.
High finance costs on loan for Faisalabad production facility squeezed net profit margins in the prevailing period.
Faisalabad plant facility is in full commercial operation now.
Consequently, the company has immobilized manufacturing operations at SITE and Gujranwala plants.
This decision is consistent with our strategic business transformation agenda
On the tax front, the company paid a higher tax worth Rs396.83m against the Rs350.76m paid in the corresponding period of last year, depicting a rise of 13.1% YoY.
| Unconsolidated (un-audited) Financial Results for quarter ended March 31, 2024 (Rupees in '000) | |||
|---|---|---|---|
| Mar 24 | Mar 23 | % Change | |
| Sales | 12,922,267 | 9,921,036 | 30.25% |
| Cost of sales | (8,862,021) | (6,298,868) | 40.69% |
| Gross Profit/ (loss) | 4,060,246 | 3,622,168 | 12.09% |
| Administrative Expenses | (487,257) | (446,177) | 9.21% |
| Selling And Distribution Expenses | (1,841,865) | (1,585,880) | 16.14% |
| Other Income | (22,922) | 518,576 | – |
| Other Operating Expenses | (81,633) | (152,331) | -46.41% |
| Finance Cost | (469,857) | (184,698) | 154.39% |
| Profit/ (loss) before taxation | 1,156,712 | 1,771,658 | -34.71% |
| Taxation | (396,832) | (350,760) | 13.13% |
| Net profit/ (loss) for the period | 759,880 | 1,420,898 | -46.52% |
| Basic earnings/ (loss) per share | 3.26 | 6.10 | – |
Amount in thousand except for EPS
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Posted on: 2024-04-30T09:20:00+05:00
