Karachi October 31 2022: TOMCL sold 1,302 MT of chilled meat, frozen meat and frozen offal compared to sales of 1,549 MT during the first quarter of the current financial year.
Volumetric sales of frozen products grew by 56%, while sales of fresh chilled meat declined by 84%.
“During this quarter your Company has started exports of private labelled frozen meat products to the Saudi Arabian market and expects that this new product category will have a steady demand in the Saudi market. The UAE continued to remain our largest market with about 72.55% of volumetric sales. Further, the exports of offal have resumed to the Far Eastern market during the current quarter” says Company Chairman Nihal Cassim.
During the first quarter of the current financial year, your Company’s sales grew by 6.59% to reach at PKR 1,139 million. The net reductions in volume are due to reduced chilled product sales in the current financial period. The Company however managed to grow volumes in the frozen meat category by around 55%.
Decreased selling prices averagely by around 9% for every product category in US$ terms and devaluation of PKR against USD averagely by 29%, as against the comparative financial period. The 10% increase in cost is directly attributable to increased sales. However, it also represents an increase due to rising meat cost, increased depreciation expense due to additional capitalization during the year. Further, there are rising salaries and wages cost due to full scale operations of fattening farm as well as Korangi offal facility.
Operating expenses increased primarily due to net increase as compared to the previous period is due to the rising freight rates on account of global container shortages, and PKR devaluation against USD which also led to increase in freight rates. Moreover, the increase is also attributable towards change in the shipment terms with some of the customers, wherein the Company has started to bear the freight expense as part of increased market penetration strategy.
Finance charges have increased significantly by 107% due to the net effect of the rising The mark-up costs on borrowings during the current year. Other income significant change is attributable to exchange gains (both realized and unrealized) on realizations of export proceeds. The net positive impact is due to exchange gains of around Rs.93 million (Sep, 2021: Rs. 8.5 million) on export. The negative impact is attributable to accrual of WPPF & WWF at prescribed rates, based on profits and export realizations respectively.
The tax increased by 65% due to the higher number of export realization as compared to prior-period due to increased export sales, which has increased the current tax expense.
As a result, TOMCL posted profit of Rs 111.8 million compared with Rs 83.8 million last year.
About the Company
The primary business activities of The Organic Meat Company Limited (“TOMCL”) is exporting fresh chilled meat, frozen meat and frozen offal to the Middle Eastern, Far Eastern, CIS, and South Asian markets as well as pet foods to the USA and other Eastern European markets. At present your Company has the ability to export to about a dozen countries. Our products are carefully packaged in cloth, vacuum packed or IWP (individually wrapped packing) food grade plastic, 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.