Faisalabad May 2 2023: Rafhan maize profitability increased 45 percent in first quarter ended March 2023 due to improved operational efficiencies despite slowdown in county exports, according to company filing to the exchange.
"Despite these challenges, Rafhan has demonstrated remarkable resilience by achieving a 41% increase in net sales and a 45% growth in the bottom line in comparison to Q1 2022. The company's success attributed to improved operational efficiencies, cost-cutting measures, smart corn buying and rationalizing prices."says company Chairman Mr. Michael Fergus O'Riordan
The Pakistani economy continues to reflect a broad-based slowdown due to a confluence of factors, such as political instability, dwindling foreign exchange reserves, a devaluation of the Pakistani rupee, and high energy and commodity prices. The situation has been further exacerbated by the delay in reaching an agreement with the International Monetary Fund (IMF) and the implementation of policy measures to fulfill the IMF's pre-conditions, which include tightening of monetary and fiscal policies and the removal of subsidies. These factors have resulted in a slowdown of economic growth, leading to a decrease in demand.
The performance of the industrial ingredient business showed a slight recovery. The textile industry, which is the largest consumer of industrial ingredients, remained sluggish due to a decline in export orders, high manufacturing costs, challenges in opening LC’s to import critical raw materials, and an increase in energy and interest rates. These unfavorable factors resulted in a decrease in sales for the company's textile segment. Similarly, the paper and corrugation segments also experienced a decline in demand due to the adverse effects of the economy and an overall drop in demand from their respective industries.
The food ingredients business faced challenges due to the highest inflationary spikes in all food and related items, which impacted the demand patterns. Consequently, volumes remained lower, particularly in confectionery and bakery products.
The demand for animal nutrition ingredients remained steady, especially from the poultry and dairy/livestock industries, due to a shortage of other feed ingredients and the company's competitive pricing.