EFOODS riding high

WEB DESK: Engro Foods Limited (EFOODS) once again has done a great job in the first half of the year. As per the company notice to the KSE, EFOODS had received massive boost to both its top line and bottom line during the six months ended June 30, 2015.

The firm’s sale grew nearly, 24 percent year-on-year. The higher volumetric sale of EFFODS flagship product Olpers, recovering Omung sales, growth in ice cream segment and higher selling price can be attributed to this performance.

Despite expansion at the top, core costs remained in check. The cost of sales is increased by nearly 15 percent year-on-year. But as a percentage of sales, it declined by 700 bps to 74 percent. The phenomenon reflected strengthening of the gross margin, which perched high at 26 percent for the period under review. It is very clear that EFOODS has taken advantage of record low international milk powder prices and domestic milk procurement prices. During the 1HCY15, average milk powder prices remained at $ 2,618 per ton compared to $ 4,342 per ton in the first half of 2014.

Up until CY13, EFOODS was having a significant issue with its distribution lines, however in CY14; EFOODS was able to resolve the issues with its distributors.

Due to a robust growth in top line and primarily lower prices of milk and powdered milk, EFOODS closed the first half of the year with a hefty net profit of nearly Rs2 billion, in year-on-year, showing an improvement of amazing 501 percent over same period last year. It has also fattened up the net profit margin from 2 percent year-on-year to 8 percent.