Corporate Briefing Notes
Unity Foods Limited (UNITY) held its corporate briefing session today to discuss the financial results and to highlight its future outlook.
● To recall, Unity Foods posted the revenue of PKR47bnbn in 1HFY23 compared to PKR39.5bn in SPLY, witnessing an increase of 18% YoY.
● Segment wise, industrial & commercial oil sales volumes inched down by 7% (price growth: 63%), Consumer packs volumes reduced by 33% (price growth 72%), Sunridge volumes increased by 22 (price growth: 10%) and Cattle Feed sales volumes down by 44% (price growth: 18%), respectively.
● Unity’s portfolio sale mix is comprised of Industrial Bulk Edible Oil (52%), Consumer Pack Edible Oil (25%), Sunridge Consumer Pack Staples (10%), Cattle Feed (7%) and others (6%), as of 1HFY23.
● The currency devaluation possess a key risk for the company that can hurt the company’s bottom line on the account of unrealized loss. To note, net loss of the company clocked in at PKR446mn during the period of Dec’23.
● As per management, the company is eyeing towards PKR100bn of topline in FY23. Whereas, the margins of Cattle feed business is set to witness a downward trend due to import restrictions. Moreover imposition of 18% GST at the time of import, will further impact the profitability of Cattle feed portfolio.
● The company is in the process of issuing right shares through which it intends to raise~PkR5bn. The purpose of this issue is to invest in Sunridge business that will help to increase its profitability.
● During the period, the company has successfully implemented SAP S/4 HANA on cloud that will enable the company to streamline its operations and increase the efficiency of the company.
● The current macroeconomic situation and political environment in Pakistan are presenting significant challenges to the businesses. However, the company is focusing to further invest into value added products, thus create an opportunity to export these products. Moreover, the company has ventured into value added goods through acquisition of Uni-Foods Industries. The production is expected to come online in next 3-4 months.
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