ISLAMABAD: Fluctuation in exchange rates has severely affected all sectors of economy and the food industry is no exception.
“Currency fluctuations do affect our company’s operations as we are dependent on import of oilseeds, edible oil and animal feed ingredients,” said Adnan Hussain, Senior Finance Manager of Unity Foods.
He was talking to WealthPK during an exclusive interview.
He said that the value of the dollar has an impact on everything in Pakistan. “When dollar rate rises, the country’s foreign reserves decline because foreign investors withdraw their investments. The fundamental cause of the high pricing in the oil and energy sectors is the dollar exchange rate.”
Q: What are the factors affecting the food industry? What efforts is your company making to enhance its operations?
A: Along with currency fluctuation, an additional factor that has an impact is political unrest. Nobody will invest in Pakistan if there is political unrest. If these circumstances persist, every foreign investor will be concerned that Pakistan will go bankrupt. Therefore, there won’t be any investment. As a result, foreign reserves will decline.
The cost of doing business is rising as a result of extremely high prices of energy.
However, the company is improving its operations through the use of SAP software to implement blockchain, giving operations additional dimensions. SAP develops enterprise software to manage business operations and customer relations.
Q: Is your company profitable even during economic depressions?
A: The company continued its operations unimpeded during the Covid-19-induced restrictions under standard operating procedures as it fell under the essential services sector, ensuring supplies to consumers across Pakistan. The company’s high growth and performance in the fiscal year 2020-21 showed the broader slump in economic activity did not affect it.
Q: What new investments has your company made during the ongoing fiscal year?
A: Unity Foods Limited has purchased 16 million shares of Sunridge Food Limited during the current fiscal year, giving the corporation 100% equity holding. A wholly-owned subsidiary of Unity Foods, Sunridge Foods has decided to make an offer to buy all of UniFood Industries Limited’s (UFIL) shares for a total transaction value of Rs1.2 billion.
UFIL is a consortium/joint venture between Habib Sugar Mills Limited, Faran Sugar Mills Limited and Mehran Sugar Mills Limited having stakes of 41%, 35%, and 24%, respectively. UFIL owns a bakery and confectionary brand, namely Good Goodies Cakes.
Q: What is your future outlook?
A: The management is focusing on improving supply chain management. Developing relationships with distributors and suppliers is important for a successful supply chain. The company also intends to increase its share in the market.
Q: What is your performance so far?
A: The company closed the financial year 2021-22 with a top-line of over Rs66 billion, which is considered an impressive growth of over 122% year-on-year. The sales stood at around Rs68 billion. The year was very challenging, but it also brought opportunities for the company.
The company was also awarded the prestigious Asiamoney Award of the ‘Most Outstanding Company in Pakistan in Consumer Staple Sector’ in 2020.
Performance in fiscal 2021-22
Unity Foods Limited’s net sales climbed 22% to Rs60 billion in the first nine months of the previous fiscal year 2021-22 (9MFY22) from Rs49 billion over the corresponding period of FY21.
The gross profit, showing an increase of 31%, stood at Rs5.69 billion in 9MFY22 as compared to Rs4.35 billion over the same period of FY21.
The profit-before-tax, showing a decrease of 35%, stood at Rs2 billion in 9MFY22 from Rs3.11 billion in 9MFY21.
The net income also decreased 37% to Rs1.79 billion in 9MFY22 from Rs2.86 billion in 9MFY21.
Earnings per share (EPS) stood at Rs1.79 in 9MFY22 compared to Rs3.31 over the same period in FY21, showing a decline of 46%, reports WealthPK.
Performance in 2020-21
During the fiscal year 2020-21, the company generated total sales of Rs68.83 billion over Rs30.47 billion in 2019-20, registering an increase of 126%.
The company achieved a gross profit in FY21 of Rs5.65 billion, registering an increase of 169% over Rs2.1 billion in FY20.
Profit-before-tax for FY21 was Rs3.55 billion compared to Rs199 million in FY20, showing a huge increase of 1,686%.
Similarly, profit-after-tax for FY21 was Rs3.33 billion compared to Rs214 million in FY21, showing another massive increase of 1,458%. Earnings Per Share Growth (%)
The earnings per share (EPS) growth was 210% in 2018. EPS growth was negative during 2019 and 2020. In 2021, the EPS growth showed a positive change of 882%. This was the highest positive change in EPS growth in recent years.
