Karachi October 8 2021: This is the first year since 2015 that the Mitchells Fruit Farms Limited (MFFL) has been able to report profits. It is remarkable to note that the Company has achieved a Rs 2.2 Billion sales in only nine months of its operations while the previous year, this was our twelve month’s turnover.
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After attaining the previous yearly sales figure in just nine months of its operations, the Company looks towards further growth in the next financial year by putting further emphasis upon profitable sales both locally and overseas. We have rejuvenated our sales force to set and achieve new targets. Our recently implemented ERP to monitor secondary sales shall go a long way towards brining visibility and concentrating our efforts where needed. We have also started the process of implementing SAP during the next financial year which shall also bring further efficiencies of processes. Some modernization of existing plant & machinery equipment is also planned that shall bring production efficiencies. Abolishment of FED shall also favourably impact the profitability of the Company.
Stock gained 15 percent in a period of one year, as per data provided by Pakistan Stock Exchange
During the period under review, the profitability also increased to a Rs 10 million profits after tax. The main factors that contributed towards the profitability were significant decrease in sales returns, increased sales volume, cost economies in variable and fixed costs and sizeable reduction in the financial cost of the Company. Fresh equity injection of Rs 750 million that was carried out this year in the shape of issuance of right shares, went a long way towards paying off the lenders and improving the long-awaited working capital requirements of the Company.
Despite highly inflationary conditions in the country, the Company put its best efforts to make efficient arrangements with its vendors in its endeavour to seek best rates for the raw & packing material despite. The production processes have also been optimized and efforts are being made to remove remaining bottlenecks and bring about further improvements and innovations.
Sales of the Company witnessed a healthy growth but were affected by lockdowns due to COVID restrictions. Our main focus was towards enhancement in the width and depth of sales operations. Even though we have a diversified product portfolio catering to all seasons and target markets, we are exposed to seasonal trends in the market as well, and were not able to fully utilize the sales opportunities available to us in the respective seasons. Exports also remained our main focus which witnessed a significant growth during the period. After many years, we were also able to focus upon various marketing activities for brand recall. This is an investment which shall be rewarded in the years to come and due to this reason, the sales and marketing costs have increased as compared to previous year.
The provision for current taxation for the year represents tax under final tax regime and minimum tax on turnover.
The main challenges for the coming financial year shall again be to manage the economic uncertainty and lower buying power of the customers as a result of the pandemic. Expansion of the export market is also dependent upon worldwide reactions to COVID and its aftereffects.