Lahore October 23 2023: Fauji Food Limtied (FFL) recorded its second consecutive PAT positive quarter (PKR 38.6 mn) in Q3 2023, according to company filing to the exchange.
The company has cemented its turnaround as it has been in green for 7 months running. The YTD revenue of PKR 14.8 bn (+83% SPLY) reflect the sustained growth momentum for the business.
Nurpur continues to drive growth (+45% SPLY). The successful marketing campaign and Route to Market revamp remain the main drivers. Nurpur was duly recognized as the most Impactful Brand by Oula (Kantar) in UHT category. The institutional business forms the other key pillar of growth strategy, and it grew by 147% over SPLY.
The commercial sustainability is reflected through improved structure of the P&L as Gross Margins increased from 3.5% 9 months 2022 to 12.3% in 9 months 2023. This was driven by continued focus on cost efficiencies backed by twin sustainability projects of 1 MW solar and bio mass which went into production in Q1 and are expected to positively impact energy cost in 2023. These initiatives along with price increases & other planned cost optimizations yielded an additional 8.8% Gross Margin. As a result, FFL achieved 9 months operating profit of PKR 258 mn vs PKR (1.07) billion loss in SPLY, an increase of PKR 1.33 billion. This is despite of renewed focus and spend behind the brand in 2023. With a solid turnaround strategy delivering results, the EBIDTA, which has been on a growth path since Q422 surged to PKR 670 Mn in 9 months23 from an EBITDA loss of PKR (702) mn, an increase of 1.37 billion over SPLY.
Looking ahead, the investment in brands and distribution infrastructure should continue to fuel the growth. With the legacy debt burden now removed from the books, the growth in Margins and EBIDTA will help grow the business even faster whilst introducing new products. The strategy of pivoting to value added portfolio will enable the business to cover the expected inflation through pricing & margin management. We are confident that FFL driven by its vision of “Unleashing Pakistan’s promise in everything we touch” will not only build a successful business but leave a mark on the broader national landscape for times to come.
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