KARACHI – Engro Foods Limited, a prominent player in the Pakistani dairy industry, has announced an 83% decline in net profit for the fiscal year 2018, according to financial statements submitted to the Pakistan Stock Exchange (PSX) on Friday.
The company’s profit after tax plummeted to Rs63.78 million for the year, a substantial drop from the previous year’s net profit of Rs379.29 million.
The primary factors contributing to this significant decline in profit are a decrease in net sales and a rise in distribution and market expenses. The net sales for the period ending December 31, 2018, fell to Rs32.44 billion, compared to Rs34.65 billion in the corresponding period of the previous year. This decline in revenue underscores the challenging operating environment faced by Engro Foods Limited.
Moreover, distribution and market expenses surged to Rs4.2 billion, up from Rs3.93 billion in the previous year. The increase in administrative expenses also played a role, rising to Rs957 million from Rs852.1 million. These escalating costs have impacted the company’s bottom line, contributing to the overall decline in net profit.
The gross profit of the company followed suit, dropping to Rs5.15 billion in 2018 compared to Rs5.64 billion in the preceding year. The unappropriated profit brought forward stood at Rs972.52 million in 2018, a notable decrease from Rs8.26 billion in the previous year. Meanwhile, the profit available for appropriation has dwindled to Rs729.66 million from Rs972.51 million.
The company reported an earning per share (EPS) for the year at Rs0.08, a considerable decrease from the previous year’s EPS of Rs0.49. This metric indicates the portion of the company’s profit attributable to each outstanding share of common stock.
Engro Foods Limited operates in a competitive and dynamic market, and the challenges reflected in the financial statements underscore the need for strategic adjustments to navigate evolving market conditions. Industry analysts suggest that factors such as increased competition, fluctuating commodity prices, and changing consumer preferences may have contributed to the company’s financial performance.
The management of Engro Foods Limited may need to reassess its operational strategies, cost management, and market positioning to address the challenges and restore profitability. Additionally, market dynamics and external factors influencing the dairy industry should be closely monitored to make informed decisions that align with the company’s long-term objectives.
As Engro Foods Limited evaluates its financial performance for 2018, stakeholders and investors will be keenly observing how the company adapts to the evolving landscape, implements corrective measures, and positions itself for sustainable growth in the future.
