Fauji Foods Posts Staggering 950% Profit Growth in Q2 2024

Fauji Foods Limited (PSX: FFL) reported a profit after tax of Rs. 234 million in April-June 2024 versus Rs. 22 million in the same period last year (+950 percent). For the six months that ended on June 30, 2024, the company returned a profit of Rs. 337 million versus a loss of Rs. 147 million in SPLY. FFL didn’t announce any dividend payouts to its shareholders for the period in review. The business has continued its growth momentum, recording a YTD revenue of Rs. 11.4 billion (+14.6 percent vs SPLY). The three strategic pillars of a) Margin Accretive Growth b) COGS reduction and c) Capability, continued to drive topline as well as bottom-line, FFL said in a brief overview of its financial results. Nurpur UHT milk remains the fastest growing Milk brand in Pakistan. It recorded 50 percent revenue growth in H1 2024 vs SPLY. The strategic acquisition of cereal business in Feb 2024 helped diversify the portfolio and allows the business to own the breakfast table. The commercial sustainability is reflected through the improved structure of the P&L as Gross Margins increased from 14.4 percent in Q2 2023 to 20 percent in Q2 2024. This was driven by continued focus on cost efficiencies backed by continuous improvement in the Supply Chain. As a result, FFL achieved Q2 2024 operating profit of Rs. 556 million vs Rs. 184 million in SPLY, an increase of 202 percent. With the commercial strategy delivering results, the EBIDTA, which has been on a growth path, closed at Rs. 1.09 billion in H1 2024 from an EBITDA of Rs. 448 million, an increase of 144 percent over SPLY. FFL offered earnings per share (EPS) of Rs. 0.09 for Q2 and Rs. 0.13 for 1HCY24. The company’s scrip at the bourse closed at Rs. 8.54, down 0.58 percent or Rs. 0.05 with a turnover of 4 million shares on Tuesday.