Hifsa Raja

Unity Foods Limited’s revenue increased 17% to Rs19.5 billion in the first quarter of the fiscal year 2022-23 from Rs16.5 billion in the corresponding period of the previous year.However, the company’s gross profit plunged 52% to Rs582 million in 1QFY23 from Rs1.22 billion in 1QFY22. The company sustained a massive loss-before-taxation of Rs2.51 billion in 1QFY23 compared to a pre-tax profit of Rs51.1 million in 1QFY22. Similarly, the company sustained a massive post-tax loss of Rs2.24 billion in 1QFY23 compared to Rs28.6 million loss in 1QFY22, showing a staggering 7,721% decline year-over-year, reports WealthPK.

The net profit margin (NPM) in 2022 decreased to 2.96% from 4.69% in 2021. However, the gross profit margin (GPM) increased to 9.55% in 2022 from 7.82% in 2021.

Earnings growth analysis

The company saw negative earnings per share growth from 2019 to 2021. However, the EPS saw a remarkable growth in 2022 as it jumped to 439.48% from -350.49% in 2021.

The company has not paid out any dividend to its shareholders during the last three years. For investors, a zero-dividend payout is not a good sign.                                                     

Industry comparison

Unity Foods Limited’s competitors include National Foods Limited, Ismail Industries Limited, Fauji Foods Limited, and JDW Sugar Mills Limited. Ismail Industries Limited, which engages in the manufacturing and trade of sugar confectionery products under the CandyLand brand in Pakistan, has the largest market capitalisation of Rs26.7 billion. Fauji Foods Limited has the smallest market capitalisation of Rs9.1 billion.The market capitalisation of Unity Food Limited is Rs16.2 billion.

Company profile

Unity Foods Limited was incorporated in Pakistan in 1991 as a private limited company under the Companies Ordinance, 1984 (now Companies Act, 2017). It was converted into a public limited company the same year. Initially, the company produced yarn, but later changed the line of production to edible oil extraction, refining and related business.

The company’s products include edible oil, staples (flour, rice, lentils, pulses), industrial fats and various feed ingredients for poultry and livestock sector. The company provides customised solutions to industries handling food and feed products. Sunridge Foods (Private) Limited is a subsidiary of Unity Foods.

Credit: Independent News Pakistan-WealthPk