engro foods announces profit of rs. 891 million
Karachi, January 24, 2012: 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 foodsbusiness 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.
Summary of Results for the year ended December 31, 2011
|(Rs. in millions)||2011||2010|
|% of sales||8%||4.4%|
|Profit after tax||891||176|
|% of sales||3%||0.8%|
|Earnings per share (Rs.)||1.22||0.31|
Dairy and Juice Segment:
The Company 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.
Juices & Nectars
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.
Ice cream and Frozen Desserts Segment:
Omore’s volume increased by 43% in 2011 and the company continued to investment in its brands, product development & diversification and cold chain infrastructure.
Dairy Farm Segment:
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.
Engro Foods Canada:
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.