Karachi March 4 2022: The Organic Meat Company Limited fattened animals are now being commercially utilized by the slaughter house at Gadap.
The farm is fattening over 1000 heads at any given time and the next step is to enhance the head count stock to 2000 animals in 4QFY22.
Trial runs for processing offals are to commence in 3QFY22 at Korangi Project as indicated previously, with full scale production to follow shortly thereafter.
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The processed meat facility will undergo test runs for equipment in 3QFY22 and is expected to be operational soon thereafter. Your Company is working to get registered with China's new Single Window Trade Platform to export heat treated beef to China by FY23.
The pet food facility's development is continuing, installation of equipment is planned for 4QFY22. A training program in Europe was attended by your Company's personnel, to acquire the required skills and product development expertise. .
Given the uncertainty in logistics and raw material availability brought about by COVID, no meaningful progress has been made on the KEPZA Project.
Company is pleased to report that following approvals from Jordan, Egyptian authorities have also permitted TOMCL and some other Pakistani companies to export meat to their market. Requisite approvals from the Egyptian Quarantine delegation have been received. In addition, TOMCL began export of ready-to-cook frozen meat to private brands in a few gulf countries. While in early stages, this represents a secured form of additional revenues and is part of the Company's growth strategy
TOMCL exported 3,153 MT of chilled meat, frozen meat and frozen offals which are lower by 356 MT or 10 percent over the same period last year. Volumetric sales of frozen products declined by 60 percent, while sales of fresh chilled meat grew by 80 percent. Total meat sales were down by 10 percent due to lower demand by quality customers, and offal sales were down by 10 percent due to lower availability of containers. The UAE remained our largest market accounting for 70 percent of export sales
Despite the fall in volumes by 10 percent, your Company's sales grew by 26 percent over the same period last year, to reach PKR 2,267 mn, selling prices were higher in each product category and were aided by a weak rupee. It is worth noting that the government has not yet renewed the duty drawback on local taxes and levies for FY22 resulting in lower net sales. Cost of sales were also higher by 26 percent due to inflationary effects on raw material, animal feed, salaries and wages as well as higher depreciation on capitalized plant and machinery. The latter is expected to continue growing as the company's various expansion initiatives come online. Gross profit margin remained constant when compared to the corresponding period last year.
Operating expenses increased by 41.2 percent due to higher freight charges in USD terms, augmented by a depreciating PKR and higher salaries and wages. Other income stood at PKR 110 mn due to exchange gains recorded. Finance charges increased by 39.4 percent due to higher borrowing. We expect finance costs to increase given the rising interest rz primarily due to lower proceeds on export sales at which poi profit after tax stood at PKR 251.8 mn compared to PKR 143., translating into an EPS of PKR 2.05 versus PKR 1.17 last year.
The primary business activities of The Organic Meat Company Limited ("TOMCL") is exporting fresh chilled meat, frozen meat and frozen offals to the Middle Eastern, Far Eastern CIS and South Asian markets. At present your Company has the ability to export to over a dozen countries. Our products are carefully packaged in cloth, vacuum packed or IWP (individually wrapped packing), and commercialized branded packaging, and are exported via land, sea and air. The meat slaughtering facility and the animal fattening farm are located in Gadap, Karachi and the offal processing, cooked and pet food processing are at Korangi, Karachi.
