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Unity Foods Limited

Unity Foods Limited

Unity Foods Limited
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Unity Foods Limited was incorporated in Pakistan in 1991 as a private limited company under the Companies Ordinance, 1984 (now the Companies Act, 2017) and subsequently converted into a public limited company on June 16, 1991.

The principal business activity of the company has been changed from yarn manufacturing to edible oil extraction, refining and related businesses.

The New Year has brought exceptional challenges to the global economy, as commodity and energy price surge remain relentless. This, coupled with the rupee depreciation has sprouted new challenges for the company.

While industrial and commercial sales continue to provide a natural hedge to the business, the management remains vigilant and is actively managing the business to keep adverse impacts to a minimum.

Unity Foods is now focusing on consolidating in the markets where it has achieved optimal product penetration. It will continue to build relations with both its suppliers and distributors for smooth and efficient supply chain management, while continuing to increase its market share with respect to consumer packs.

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During the quarter ended September 30, 2021, Unity Food’s unconsolidated revenues stood at Rs16.6 billion, which is an impressive growth of over 36.3 per cent over three months ended September 30, 2020.

Despite turbulent times, Unity Foods continued to excel and grew and has been successful in achieving a gross profit of Rs1.2 billion.

However, owing to unprecedented and unpredictable rupee depreciation during the quarter, the profits have been adversely affected by Rs683.8 million, which comprises Rs292.7 million realised exchange losses, whereas the remaining Rs391.1 million represents unrealised exchange losses.

As a result, the company incurred a net loss of Rs28.7 million for the period. The unrealised loss corresponds to inventory held by the company at cost having higher net realisable value (NRV) on the balance-sheet date.

During the quarter, Sunridge Foods (Pvt) Ltd, the 100 per cent owned subsidiary of Unity Foods, posted sales of Rs1.7 billion with the gross profit of Rs196 million and a net loss of Rs5.5 million.

The sales grew over four times, compared with the quarter ended September 2020, owing largely to rapid expansion of brand, higher volumes and rising local prices.

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