Engro Foods announces profit of Rs891 million

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Board of directors of Engro Foods Limited has announced a profit after tax of Rs891 million for the year ending on December 31, 2011 as compared to Rs176 million in 2010. Engro Foods’ revenue for 2011 recorded an increase of 43 per cent and stood at Rs30 billion as compared to Rs21 billion in 2010. The company also announced an EPS of Rs1.22 (basic and diluted) for the year 2011 as compared to EPS of Rs0.31 in the year 2010. Engro foods continued to consolidate its growth through the year and during the first half of the year, in May 2011, the foods business raised Rs1.2 billion by issuing 48 million shares to the institutional investors – mainly the US and UK mutual funds – at a share price of Rs25 per share. The company’s vision to enhance its footprint and pursue a focused growth strategy led to the first-ever public offering of 27 million shares of the business to the general public at a price of Rs25 per share – inclusive of a premium of Rs15 per share.
The company continued its aggressive business strategy of growth and diversification and achieved volume growth of 22 per cent in 2011. Building on its promise of elevating consumer delight, the business diversified into popularly priced, high quality product category with the launch of Dairy Omung – a nutritious and affordable dairy product for lower income consumers. Innovation remained at the core of the business product
expansion strategies this year and we also introduced Olper’s variants of Badam Zafran and Rose flavors which were well received by the market.
The year 2011 also marked the relaunch of the refreshing Olfrute brand which continues to reflect strong consistent growth in its volume base. With six invigorating flavors Olfrute registered a volume growth of 236 per cent in 2011.
Omore’s volume increased by 43 per cent in 2011 and the company continued to investment in its brands, product development and diversification and cold chain infrastructure.
The company’s Nara Dairy Farm continued to remain a rich and nutritious source of raw material for its dairy segment. Nara Farm produced over 5.8 million liters of milk in 2011 with a total herd size of over 3,000 animals.
Mirroring its success in the local market, Engro Corp – the parent company – made its foray within the international arena with acquisition of Al-Safa – a leading halal meat brand in North America – at a total cost of $6.3 million in April 2011. The business is owned by Engro Corp, but managed by Engro Foods. During the first eight months of operations (since the acquisition) till December 31, 2011, Al-Safa brand sales were $5.3 million and the operational loss was $1.2 million including the pre-commencement cost of $0.33 million. Since Engro Corporation currently owns the equity stake in Engro Foods Canada these losses are not included in the company’s financial performance. Engro Foods will buy the equity shares from the holding company at the actual cost post-approval of the regulator. The board expressed confidence in the strategic vision and direction of the management and indicated a clear signal to pursue a long-term growth strategy.