Unilever Pakistan Foods Ltd (KSE: UPFL) has lately been delighting consumers with the launch of several new variants in various categories regardless of the persistently tough operational climate in the country. The first quarter results, announced on Friday, showed no extraordinary improvement in the firm’s profit margins over previous years, but topline and bottomline both expanded in double digits.
For the makers of Knorr, the topline went up by 12 percent during 1QCY14 vis-à-vis the same period last year, which is better than Engro Foods. Gains have seemingly come from successful brand management and sustained investment in below-the-line advertising channels. However, within the foods group, Nestle takes the cherry on the icing of the cake with its revenue growth of 18 percent year-on-year in1QCY14.
As year-on-year increase in core costs and operating expenses was in line with topline growth, the firm’s EPS grew by 15 percent year-on-year as a result of continued focus on delivering savings through cost efficiencies.
Going forward, the coming quarters of the year will plausibly see greater growth in the UPFL revenues. This is due to the summer season having commenced in the country, which will bring an associated sales increase for its Energile and Glaxose-D brands. Despite the prevailing macroeconomic challenges such as inflation and volatile currency and with the energy shortages expected to continue, UPFL management seems optimistic to overcome these obstacles through a combination of strong brand equities, global expertise, powerful innovations and world class customer service.
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UNILEVER PAKISTAN FOODS LIMITED
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Rs (mn) 1QCY13 1QCY14 chg
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Net sales 1,743 1,951 12%
Cost of sales 1,009 1,132 12%
Gross profit 734 819 12%
Distribution, administration
& other operating incomes 363 405 12%
NPAT 254 293 15%
EPS (Rs) 41.39 47.66
Gross profit margin 42.1% 42.0%
Operating profit margin 21.2% 21.2%
Net profit margin 14.6% 15.0%
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Source: KSE notice
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