In the fiscal year 2023, Shezan International Limited encountered a significant setback in net profitability, experiencing a 51% decline to PKR 38.77 million (EPS: PKR 4.01) from PKR 79.92 million (EPS: PKR 8.27) in the same period last year.
The company’s overall revenue, however, saw a 7% uptick, reaching PKR 8.75 billion in FY23 compared to PKR 8.17 billion the previous year. Juices & drinks contributed PKR 7 billion, whereas other products like pickles, jams, and ketchup contributed PKR 1.7 billion to the revenue in FY23.
Shezan International Limited experienced a 40% growth in export sales, translating to a 17% growth in dollar terms. Cooked food, juice packs, bottled juices, and ketchup were the primary contributors to the company’s export sales.
Operating costs increased due to a rise in prices of raw material and packaging material, along with an increase in minimum wages. Despite these challenges, the gross profit of the company increased by 17% to PKR 6.67 billion in FY23 from PKR 6.39 billion in the previous year. The operating profit also saw a significant boost, rising by 58% YoY to PKR 333.32 million from PKR 210.79 million during the same period last year.
Finance costs for SHEZ surged by 135% YoY to PKR 279.65 million from PKR 119.19 million, primarily due to increased interest rates and mark-up rates. The company’s contribution to the national exchequer in FY23 amounted to PKR 133.04 million, marking a 25% increase from the previous year’s taxes of PKR 106.48 million.
The profitability of the company in the 4QCY23 was adversely affected by the Federal Excise Duty (FED), which imposed a 20% excise tax on carbonated beverages. Additionally, major raw materials such as pulp and sugar experienced significant price hikes during this period.
Going forward, Shezan International Limited anticipates continued pressure on gross margins due to expected increases in sugar and gas prices. Despite this, the management remains optimistic about a demand uptick in the upcoming season. Moreover, the company plans to explore potential markets both locally and internationally. Shezan plans to introduce new products, including recipes and mineral water in March next year. Moreover, mayonnaiseexpected to be launched within the next two months.
Important Disclosures
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