LAHORE – The Engro Foods has planned to invest Rs8.7 billion mainly for expansion purposes, of which Rs1.5 billion has been spent till 1H2012. The management expects to make commitments for the full amount of targeted Capex plan till the end of the year.
Experts said that the revenues of ice cream business of Engro Foods (Omore) witnessed an increase of 180 per cent QoQ in 2Q2012 due to the seasonality factor and the gross margin has increased to 40 per cent, up 17ppt from previous quarter. However, the bottom line remained red due to continuous expansions and brand building exercises. The segment reported a loss of 31 million in 2Q2012.
Engro Foods Limited held its analyst briefing to discuss its 1H2012 result. The company reported a Profit After Tax of Rs1,018 million (EPS: Rs1.35) in 1H2012, up 370 per cent YoY compared to a PAT of Rs216 million (EPS: Rs0.29) in the same period last year. In 2Q alone, earnings registered a growth of 9 per cent QoQ to Rs532 million (EPS: Rs0.70). The growth was derived from the dairy and juices segment, which has now touched the market share of 50 per cent from 44 per cent in the end of 2011. Despite growth in the revenues of ice cream business, up 180 per cent QoQ, the bottom line remained red which somewhat curtailed the cumulative growth.
According to experts, the UHT segment was the primary contributor in the Dairy and Juices business. The UHT segment witnessed a volumetric growth of 39 per cent YoY in 1H2012 mainly because of higher sales of Tarang (tea whitener) and Dairy Omung (for budget conscious society of the country). To recall, the recent hike in milk prices by Rs10/litre was only applicable on Olper’s while Dairy Omung prices remained intact.
However in 2Q alone, the Dairy and Juices business reported a decline of 3.3 per cent QoQ in revenues due to seasonality factor. Consequently, the net profit margin has decreased by 1ppt to 6 per cent.