Lahore April 20 2023: FFL achieved growth of 116.6% in Net Revenue in 01 of 2023 over same period last year (SPLY), according to company filing to the exchange.
This was driven by continued volume growth in UHT milk 54% versus SPLY and increase in distribution by 13,000 outlets vs SPLY and yet another strong quarter of Institutional Sales that achieved Rs. 2.03 billion revenue, a growth of 231% vs SPLY.
The topline growth was complimented by improvement in Gross margins that grew from 6.4%
01 2022 to nearly double 12.8% in 01 2023, highest in the history of FFL. The twin sustainability projects of 1 MW solar and bio mass went into production in Q1 and are expected to positively impact energy cost in Q2 2023. In line with our strategy to optimize costs, company localized packaging of a key SKU. These initiatives along with price increases & other planned cost optimizations yielded an additional 6.4% Gross Margin. As a result, FFL achieved highest ever operating profit of PKR 127 mn vs PKR (278) mn loss in SPLY & an EBIDTA of PKR 253 million, a growth of 262% over SPLY.
Q1'23 interest cost of PKR 299.78 mn is essentially what resulted in the loss after tax of PKR (170) mn for Q1'23. On March 8th 2023, the entire debt of PKR 8.0 bn was paid off after completing the other than right equity injection process. The repayment of legacy debt, which was a serious drag on the business performance, now provides a platform to grow the business in a sustainable manner.
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 political and economic uncertainty is unlikely to go away in the near future, however 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 a new chapter in the journey of FFL begins enabling it to take strides towards fulfilling the tremendous potential in dairy and food business in Pakistan.
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