KARACHI:
Engro Foods profit up four-fold
A strong performance by the dairy segment pushed Engro Foods’ net profit up four folds to Rs891 million in 2011 against Rs176 million in 2010.
Engro Foods has successfully grabbed 45% of the market share in ultra-high temperature goods particularly its packaged milk Olpers, according to company officials. The subsidiary is also expected to surpass the fertiliser business and become the highest revenue making wing of the conglomerate soon.
Revenues grew by 43% to Rs29.9 billion while gross margins grew by 1.23% to 22.2%, according to a notice sent to the Karachi Stock Exchange on Tuesday.
The recently launched dairy product Omung could be a game changer for the packaged milk industry as it is very competitively priced to the still dominant loose milk, which represents more than 90% of the milk market, says an AKD Securities research note.
Financial charges declining by 19% to Rs250 million on a quarterly basis also contributed to the net profit growth.
Improving margins, particularly the ice cream segment as well as sales growth, is expected to drive earnings growth going forward, says the note.
“Furthermore, geographic diversification with the acquisition of Al-Safa could also be a long-term value driver for the company,” adds the note.
Engro Corporation is all set to enter the halal food business in North America after signing an agreement with US-based Al Safa Halal to purchase its food business. The precise size of the transaction was not disclosed, though the company stated that its acquisition, inventories and brand-building efforts would cost up to $15 million.
Honda has managed to cut down its losses during April to December 2010 despite witnessing a sharp slowdown in sales.
Honda Atlas Cars (Pakistan) Limited losses fell 48% to Rs143 million against Rs276 million in the same period last year, according to a notice sent to the Karachi Stock Exchange on Tuesday.
The company faced sever constraints in the supply of parts during the period under review as floods in Thailand disrupted Honda operations worldwide including Pakistan, said Summit Capital analyst Muhammad Sarfraz Abbasi.
The situation gradually aggravated and operations almost ground to a halt in December as the company failed to manufacture a single car in its assembly facilities owing to unavailability of parts.
Production declined by 16% to 9,900 units compared with 11,728 units produced by the company in the same period last year. Starting the trickle down effect, sales also fell 9% to 10,233 units in comparison of 11,185 units in 9MFY11.
Consequently, monetary sales of the company witnessed a decline of 3% to Rs14.43 billion during April to December 2011 against sales of 14.83 billion in the corresponding period last year. The decline would have been wider, but it was somewhat covered by the increase in car prices, added Abbasi.
The company’s stock price rose Rs1.03 to close at Rs122.09 at the Karachi Stock Exchange on Tuesday.
Despite the growth of 165% in other income and 18% lower financial charges, a substantial rise in other operating cost which has witnessed an increase of 104% to Rs195 million, led the company to post a loss before tax of Rs42 million, said Abbasi.
Published in The Express Tribune, January 25th, 2012.
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