Al Shaheer Corporation Limited (ASC) recorded remarkable growth of 58 percent year-on-year in its top line. Exports contributed the largest chunk to the company's turnover which continues to grow by leaps and bounds. However, the company's domestic sales are quickly gathering pace as well.
Although the meat company has recorded healthy sales growth of 46 percent year-on-year during the second quarter, the tremendous sale growth in 1QFY16 of 69 percent year-on-year was the main ingredient in its success during the six-month period.
Core costs have largely stayed on the higher side, although this was expected due to the nature of the business. Margins did not grow in line with the revenue growth during this period. This has to do with the business cycle and is also due to higher than expected livestock prices during the period.
However, it is interesting that even though the world is suffering massive decline in global commodity prices; beef and other meat products prices have been resilient during the ongoing slump. The lack of price decline
globally and strong domestic meat prices which have followed an overall increasing trend in the local market over the years certainly helped ASC. Although, finance cost has come down significantly, this is still a relatively chunky cost for the Al Shaheer due to Murabaha costs. Significant increase in the top line along with lower operating and finance costs and higher other income helped the company record 49 percent year-on-year increase in the bottom line for the period.
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