October 26, 2021 (MLN): Unilever Pakistan Foods Limited (PSX: UPFL) has shown significant progress during 9MCY21 as its net profits stood at Rs3.61 billion, registering an increase of 45% YoY on account of broad-based growth with both retail business and Food Solutions.
This has translated into earnings per share (EPS)-basic and diluted of Rs567.20 during 9MCY21, up by around 45% YoY versus the same period last year driven by growth, margin improvement and tax credits pertaining to capital expenditure.
In view of the financial results for 9MCY21, the Directors have recommended a third interim cash dividend of Rs187 i.e. (1870%) per ordinary share of Rs10 each. In the same period last year, a cash dividend of Rs120.52 had been recommended by the Board.
Pursuant to the financial statement provided to PSX, the company’s sales grew by 27.9% on the back of strong fundamentals i.e. brand equity, wider reach and effective spending on advertisement and promotion. The growth was broad-based with both retail business and Food Solutions delivering strong results as a result of easing lockdowns.
Resultantly, the gross margin increased by 1.23ppt to 43.69% versus the same period last year, through a combination of pricing, better cost absorption and a rigorous savings agenda.
Meanwhile, the finance cost dropped by 4.26% YoY to Rs19.5mn due to lower borrowing costs. Moreover, the company’s effective tax rate improved from 8% to 4% in the said period.
“Pakistan's economy has shown resilience in the face of global COVID -19 pandemic, witnessing GDP growth of 3.94% in the fiscal year 2021 as a result of timely monetary and fiscal measures. This was supported by a nationwide vaccination drive which has, so far, played an important role in successfully fighting COVID,” the company’s financial statement said.
With restrictions easing out further, commercial activity is expected to return to pre-covid levels. However, rising global commodity prices and energy costs coupled with sharp rupee devaluation are expected to further aggravate the inflationary headwinds which in turn, may have significant implications on the economic activity in the country, it highlighted.
In such challenging times, the management of the company remains committed to navigating by leveraging the power of their brands and global and local expertise to drive efficiencies within the value chain.
“We will continue our efforts on providing value to our consumers to meet their daily needs and on delivering competitive, consistent, responsible, and profitable growth benefitting all stakeholders,” it added.
Financial Results for the Nine Months Ended September 30th, 2021 ('000 Rupees) | |||
|---|---|---|---|
| Sep-21 | Sep-20 | % Change |
Sales | 14,505,213 | 11,340,691 | 27.90% |
Cost of Sales | (8,168,364) | (6,525,151) | 25.18% |
Gross profit | 6,336,849 | 4,815,540 | 31.59% |
Distribution, admin & other operating expenses | (2,766,357) | (2,243,569) | 23.30% |
Other incomes | 186,578 | 158,744 | 17.53% |
Finance cost | (19,487) | (18,691) | 4.26% |
Profit before taxation | 3,737,583 | 2,712,024 | 37.82% |
Taxation | (124,573) | (217,982) | -42.85% |
Profit after tax | 3,613,010 | 2,494,042 | 44.87% |
EPS – basic and diluted (Rupees) | 567.20 | 391.53 | 44.87% |
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