Karachi October 28 2021: During the first quarter ended September 30, 2021, Unity Foods Limited, has reported net loss of PKR 28.7 million as per Pakistan Stock Exchange (PSX).
Unity unconsolidated topline stood at PKR 16.6 billion which is an impressive growth of over 36.3% over three months ended September 30, 2020.
Despite turbulent times, your Company continues to excel and grow and has been successful in achieving a gross profit of PKR 1.2 bill ion . However, owing to unprecedented and unpredictable rupee devaluation during the quarter, company’s bottom-line has been adversely affected by PKR 683.8 million which comprises of PKR 292.7 million realized exchange loss whereas the remaining PKR 39 1.1 million represents unrealized exchange loss. As a result, the Company has incurred a net loss of PKR 28.7 million for the period. The unrealized loss corresponds to inventory held by the Company at cost having higher Net Realizable Value (NRV) on the balance sheet date. The impact of such losses, till the time of realization, may vary (positively or negatively) in line with exchange rate movement.
Unity Foods is cognizant of this inherent and exogenous risk and is in discussions with its suppliers and lenders to evaluate potential structures under which its FCY exposure will be limited and resultantly reduce profit volatility owing to exchange fluctuations.
During the quarter, Sunridge Foods (Pvt) Ltd ., the 100% owned subsidiary of Unity Foods, posted sales of PKR 1.7 billion with gross profit of PKR196 million and a net loss of PKR
5.5 million. Sales grew over 4 times compared to the quarter ended September 2020
owing largely to rapid expansion of our brand, higher volumes and rising local prices.
Sunridge’s selling and distribution expenses have also increased by over 400% largely
on account of brand building activities that will have a positive impact on the market share
going forward .
On a consolidated basis, our sales stood at around PKR 18.2 billion .
The new financial year has brought exceptional challenges to the global economy as
commodity and energy price surge remain relentless as we report. This, coupled with
devaluation, as explained above, has sprouted new cha llenges for the Company. While
our Industrial and Commercial Sales continue to provide a natural hedge to the business,
the management remains vigilant and is actively managing the business to keep adverse
impacts to a minimum.
The Company is now focusing on consolidating in the markets where it has achieved optimal product penetration. It will continue to build relations with both its suppliers and
distributors for smooth and efficient supply chain management, while continuing to increase its market share with respect to consumer packs.
The Company will also continue to develop its client base in the Industrial and Commercial
segment from where it can derive steady cashflows. Says Chief Executive Officer Mr. Muhammad Farrukh
He added that “With Covid vaccinatIOn program moving forward smoothly in the country, the Company expects HORECA sector to achieve full strength and complement the already supportive demand.”
