By
Abdul Qadir Qureshi
The
Board of Directors of Engro Foods Limited has announced a profit after tax of
Rs. 891 million for the year ended, December 31, 2011 as compared to Rs 176
million in 2010.
Engro Foods’ revenue for 2011 recorded an increase
of 43% and stood at Rs. 30 billion as compared to Rs. 21 billion in the 2010.
The Company also announced an EPS of Rs. 1.22 (basic & diluted) for the
year 2011 as compared to EPS of Rs 0.31 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 Rs. 1.2 billion by
issuing 48 million shares to the institutional investors – mainly the US &
UK mutual funds – at a share price of Rs. 25 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 Rs. 25 per share, inclusive of a premium of Rs. 15 per
share.
The
Company has continued its aggressive business strategy of growth and
diversification and achieved volume growth of 22% 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’s 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% in 2011.
Omore’s
volume increased by 43% in 2011 and the company continued to
investment in its brands, product development & 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. The 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 US $6.3 million in April 2011. The business is owned by
Engro Corp, but managed by Engro Foods. During
the first 8 months of operations (since the acquisition) till December 31,
2011, Al-Safa brand sales were US $5.3 million and the operational loss was US
$ 1.2 million including the pre-commencement cost of US $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 by building an inherent
cost-consciousness and product positioning for the business.
