NFL earns profit of Rs1.759 billion

LAHORE: The National Foods Limited (NFL) earned the net profit-after-tax of Rs1.759 billion for the year ended June 30, 2021, which is 5.1 per cent of the net sales and 19 per cent higher against last year, a statement issued by the company said.

At the group level, NFL delivered a healthy topline and bottom-line growth of 20 per cent and 19 per cent, respectively, for the financial year 2021, despite prevalent Covid-19 situation.

The topline continued its momentum, which was supplemented by cost and revenue transformation measures, enabling steady gross and net profit margins.

The group’s core business profit-after-tax margin to net sales closed at 6.7 per cent, which is 0.3 per cent higher than FY20. Similarly, A1 Bags and Supplies maintained the profit-after-tax margin to net sales at 5 per cent.

The company has announced a cash dividend of Rs5/share and bonus of one share for every four shares held on the date of determination of entitlement to receive dividend.

During the year, the contribution of NFL to the national exchequer has further increased and the company paid over Rs5.281 billion (Rs4.813 billion in 2020) to the government and its various agencies on account of different government levies, including Customs duty, sales tax and income tax.

Moreover, foreign exchange of Rs2.220 billion (Rs1.361 billion in 2020) was also generated through export of products.

“The local business and political landscape has been generally stable over the course of the year, especially with significant improvement in the Covid-19 situation across the country post-successful strategy being deployed for its management.

The tax and economic reforms targeting positive movement in the economy have improved the investors’ confidence,” Abrar Hasan, CEO of NFL, said, adding that NFL’s gross margins are dependent on key local and imported inputs and there is ambiguity over the prices due to uncertain climatic changes.

Low local outputs, resulting in additional imports are hurting the raw material pricing, amid restricted price pass-on opportunities in a highly competitive environment.

“[A] decrease in exchange rate during the fiscal year can impact the company’s gross margins in the local business due to the impact on the prices of key inputs. However, with a fine balance of exports and imports, the company gets a natural hedging of the foreign currency fluctuation,” the CEO said.

“On the international front, the company recognises the risk emanating from the regime change in Afghanistan and will continue to monitor and take measures to minimise the impact on the business,” he said.

National Foods maintained its commitment towards its employees by providing them incentives and timely salary disbursements during the pandemic.

The CEO said the company remains committed to drive business fundamentals and improve/maintain its market leadership position in all major categories through the contingency planning.