Karachi May 5 2022: Following exports to US, The Organic Meat Company Limited (TOMCL) is now geared up for its first export of pet foods to Europe, as per company filling to the exchange.
Acceptance of this product line will pave the way for exports of a completely new line of high margin products to an untapped market. In addition, TOMCL's export of ready-to-cook frozen meat to private brands continues to gain traction in gulf countries.
Although in early stages, both these avenues represent secured forms of additional revenues and are part of the Company's growth strategy. Exports are continuing to Saudi Arabia and this should put to rest rumors of bans on Pakistani meat.
TOMCL exported 4,724 MT of chilled meat, frozen meat and frozen offals which are lower by 381 MT or 7% over the same period last year. Volumetric exports of frozen products declined by 64%, while sales of fresh chilled meat grew by 72%. The shrinkage in volumes is attributable to 27% lower offal sales due to covid restrictions in Hongkong and Vietnam. The UAE remained our largest market accounting for 72% of export sales.
The sales of The Organic Meat Company grew by 28% over the same period last year, to reach PKR 3,449 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 up by 29% due to inflationary effects on raw material, animal feed, payroll and 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 flat when compared to the corresponding period last year. Operating expenses increased by 80% due to the rise in freight rates, PKR devaluation, salaries and wages, while other income stood at PKR 164 mn due to exchange gains and gain on sale of biological assets (fattening farm cattle). Finance charges increased by 36% due to higher borrowings. The profit after tax stood at PKR 322 mn compared to PKR 208 mn for the same period last year, translating into an EPS of PKR 2.62 compared to PKR 1.69 last year.
The primary business activities of The Organic Meat Company Limited ("TOMCL") are 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, IWP (individually wrapped packing) and commercialized branded packaging, then 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.