Karachi May 1 2024: Unity Foods reported loss of PKR 1.2 Billon during the 9MFY24 period due to to adverse changes in oil prices amid the supply glut in the country and higher financial charges.
Unity Foods has registered a marginal decline of 12% in its net sales during the 9MFY24, compared to the same period last year. Despite challenging macroeconomic and business environment, Unity Foods posted consolidated net sales of PKR 69 billion while earning a gross margin of 10% during 9MFY24. The gross profit for the period under review was PKR 6.69 billion. However, owing to increased financial costs, net margins suffered, clocking in at negative 2% for the 9MFY24.
The 9MFY24 monthly average of palm oil and soybean oil prices stood at USD 851 per ton and 1,060 per ton respectively. Overall edible oil prices remained relatively lower as compared to the highest levels recorded in 2022, mainly due to subdued demand from China and India. Despite the slight surge in the global palm oil prices, the local oil prices and processing remained subdued during the 2HCY23 resulting in lower sales and build-up of excess inventory of edible oil in the country. The situation has started to ease in the 1HCY24 with local price parity turning positive.
On a quarter-on-quarter basis, Unity Foods’ consolidated sales stood at over PKR 23 billion compared to about PKR 31 billion for the quarter ended 31 Mar 2023. Gross Profit for the same period stood at PKR 1.78 billion reflecting a gross margin of around 8%. The decline in margins is partly attributed to adverse changes in oil prices amid the supply glut in the country.
Sunridge Foods closed the nine months of its current financial year with sales of over PKR 21 billion reflecting significant increase from PKR 7.8 billion reported in the same period last year. The net profit of Sunridge Foods declined to PKR 238 million during the nine months period under review (compared to PKR 256 million in the same period last year).
For the nine months period ended 31 Mar 2024, Sunridge Foods posted gross profit of PKR 2.4 billion indicating surge of 71% from the corresponding figure of PKR 1.4 billion reported as of 31 Mar 2023. However, the gross margins during 9MFY24 declined to 11 % from 18 % reported during 9MFY23 due to rise in raw material costs amid heightened inflation.
The country is expecting bumper wheat crop this year which is expected to contain the raw material costs going forward which would in turn improve margins in the coming months. The business will continue to invest in market penetration, brand equity and capacity upgrades to expand and leverage its profit accretive product portfolio.
Sunridge Confectionery Limited is a wholly owned subsidiary of Sunridge Foods (Private) Limited, which is in turn the wholly owned subsidiary of the Company. Sunridge Foods has diversified its offerings through Sunridge Confectionery, now featuring value-added products like cupcakes and a range of confectionery items. With a proactive approach, Sunridge Confectionery is expanding its market presence through increased sales volumes and the introduction of new products. This strategy aims to broaden revenue streams and capitalize on synergies within the company.
