Unity Foods Limited (UNITY) – March 2023

Research Team

Table of Contents

Corporate Briefing Notes

Unity Foods Limited (UNITY) held its corporate briefing session today to discuss the financial results and to highlight its future outlook.

Key Highlights

● 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.

Future Outlook

● 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.

Important Disclosures


This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.

Analyst certification:

The research analyst for this report certifies that 1.all of the views expressed in this report accurately reflect her personal views about the subject and 2.no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this report.

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