The company Figured out how to regain some of its lost market shares by registering a revenue growth of 37% from the corresponding quarter of last year in spite of a tougher business environment with high competition. During the quarter, the net sales of the company were accounted for Rs. 1.56 billion, up by 37% as compared to Rs. 1.14 billion in the same quarter of 2019. Credible sources quote that FFL has improved its market share massively in the food sector. This is due to the closed borders as a result of the coronavirus pandemic. Furthermore, Fauji Foods has been profited by the lack of imported alternatives.
A change in higher administration was founded in the company as Muhammad Haseeb Aslam was selected as the new CEO of Fauji Foods Limited viable July 1, 2020. He is the second subsequent to be appointed as CEO this year. He replaced Sarfaraz Ahmed Rehman, the former CEO of Engro Foods. The expense of income was reported at Rs. 1.57 billion as compared to Rs. 1.59 billion. Due to the increase in sales, the company managed to reduce its gross loss by 98% to just Rs. 9.01 million from Rs. 444.53 million in the same quarter last year. The recovery in revenue growth was damaged by high input costs, currency devaluation, and high finance costs.
Fauji Foods Limited
The second quarter was influenced globally by the COVID-19 pandemic and slows down the economic activity but the company tried its best to meet the demand of the consumers. The company’s business model is very good with management trying hard to improve financial wellbeing. They are also expanding the capacity units of cheese and butter and are looking forward to adding new products in their product line. After lower interest rates, the cost will decrease but they still need to reduce the most harming part, which is debt and working capital requirements through injecting more equity, retrofitting as this model requires a lot of investment at the initial stage.
During this time period, the company also informed that the SECP had approved the debt to equity conversion of the disbursed loan of Fauji Fertilizer Bin Qasim Limited (FFBL) to the FFL that amounted to Rs. 2.63 billion together with a mark up of Rs. 118.864 million.
Half Year results
During the first half-year of 2020, FFL’s losses reduced by 24.36% to Rs. 1.77 billion as compared to Rs. 2.34 billion recorded last year. It is worth mentioning that Fauji Foods has been incurring losses since 2013. The company’s sales increased by 27.30% to Rs. 3.22 billion as compared to Rs. 2.53 billion in the same period last year. It reported a loss per share of Rs. 3.37 as compared to Rs. 4.43. FFL’s shares at the bourse closed at Rs. 11.04, up by Rs. 0.38 or 3.56% with a turnover of 23.45 million shares on Thursday.