RafhanMaize Products

RafhanMaize Products Limited reported upbeat financials for the quarter ended March 2015, announcing Rs25 per share dividend. The company's bottom line posted an impressive double-digit growth despite a minor decline in net sales. It did this largely owing to a decline in costs.
While the director's report is unavailable, one can take hints from the firm's prior reports. RafhanMaize's operations are "highly energy intensive" and the decline in international fuel prices reduced its costs greatly; amid the continuing energy crisis, the firm adopted expensive alternate fuels to ensure a continued supply. The decline in these fuel prices resulted in a six percent drop in costs year-on-year, boosting gross margins by 300 basis points.
The leading corn refiner of Pakistan makes a variety of products that are utilized in over 60 types of industries including textile, pharmaceutical, paper, corrugation, and personal care. This type of diversification gives RafhanMaize comfortable hedges against a decline in any one industry. So, while the demand from some industrial segments (such as paper and board segment) could witness slow demand, RafhanMaize's corrugation, home and personal care, food, and animal health segments would report strong growth.
RafhanMaize takes its cues from the manufacturing and agricultural sector of Pakistan. As the economy is looking up and GDP growth starts looking ambitious, RafhanMaize is well poised to deliver exceptional growth in the years to come.

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RafhanMaize Products Limited

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Rs. (million)             1QCY15    1QCY14       YoY

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Net Sales                  6,019     6,157       -2%

Cost of Sales              4,834     5,141       -6%

Gross Profit               1,185     1,016       17%

GP Margin                    20%       17%   300 bps

Distribution Expenses         66        56       18%

Administrative Expenses       95        90        6%

Other Income                  50        42       19%

Other Operating Expenses      78        66       18%

Operating Profit             996       846       18%

Finance Cost                   5        40      -88%

Profit Before Tax            991       806       23%

Taxation                     309       247       25%

Profit After Tax             682       559       22%

NP Margin                    11%        9%   200 bps

EPS                           74        61       22%

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