Karachi: Fauji Foods Limited (FFL) announced no cash dividends, bonus shares, right shares, or any other entitlements in their recent board meeting held on July 22, 2024. This decision comes despite a notable improvement in the company’s financial performance for the first half of the year ended June 30, 2024. According to information available from the Pakistan Stock Exchange (PSX), Fauji Foods reported substantial growth in profitability during the period.
The company’s unconsolidated and consolidated financial statements reveal a significant increase in revenues and profits. The unconsolidated revenue reached Rs 11.41 billion for the six-month period of 2024, up from Rs 9.96 billion during the same period in 2023, marking a 14.6% increase. Similarly, consolidated revenue for the same period matched these figures. Notably, Fauji Foods turned around its profit after taxation (PAT) from a loss of Rs 147.31 million in the first half of 2023 to a profit of Rs 337.21 million in 2024.
This financial turnaround was driven by a series of strategic initiatives focusing on margin accretive growth, cost of goods sold (COGS) reduction, and capability enhancement. Noteworthy is the performance of the Nurpur UHT milk, which reported a 50% revenue growth and remains the fastest-growing milk brand in Pakistan. The acquisition of a cereal business earlier in February 2024 has further diversified Fauji Foods’ portfolio.
The company also reported operational improvements, including an increase in gross profit margins from 14.4% in the second quarter of 2023 to 20% in the same period in 2024. These results reflect effective cost management and operational efficiencies. The profit from operations for the three-month period ended June 30, 2024, stood at Rs 555.57 million, a significant increase from Rs 183.80 million in the corresponding period last year.
Despite the absence of any shareholder distributions, Fauji Foods is optimistic about its future performance. The company highlighted upcoming challenges such as the 18% GST on packaged milk expected to impact the industry. Nevertheless, Fauji Foods plans to continue its growth trajectory, supported by investments in brand and distribution and a high-margin Cereals portfolio.
FFL’s financial report for the first half of 2024 will be transmitted through PUCARS within the specified timeframe, ensuring stakeholders are kept informed of the company’s financial health and strategic direction.
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