Fauji Foods swings to profit in 2023

KARACHI: Fauji Foods Limited on Tuesday reported a net profit of Rs605 million for 2023, reversing a loss of Rs2.17 billion a year earlier, as revenue and gross margin improved.

The company, a subsidiary of Fauji Fertilizer Bin Qasim Limited, said in a statement to the Pakistan Stock Exchange on Tuesday that earnings per share were Rs0.26, compared with a loss per share of Rs1.37 in 2022.

The company did not declare any dividend for the year.

Revenue rose 60.4 oercent to Rs19.81 billion, driven by higher sales volumes and prices of dairy and food products.

Gross profit surged 207.7 percent to Rs2.98 billion, as the company benefited from lower raw material costs, better product mix and operational efficiencies.

Other income increased 19.6 percent to Rs238.5 million, mainly due to higher interest income from bank deposits.

Finance cost dropped 74.3 percent to Rs323.8 million, as the company reduced its borrowings.

However, other expenses jumped 333.4 percent to Rs577.9 million, mainly due to higher selling and distribution expenses, impairment losses and legal charges.

The company said it expected to sustain its growth momentum in 2024, as it invested in its brands and distribution network.

"The compelling synergies across the three businesses will broaden the margin base and improve the P&L structure... The acquisitions, once completed (post statutory approvals), are expected to be EPS accretive," the company said.