Food & Personal Care-Products: RAFHAN BEST FOODS LIMITED - Half Year Ended June 30 2004

During the period under review Rafhan Best Foods Limited has shown encouraging financial results. Its share is trading at Rs 265 per share, which is more than 26 times of the par value. During the last one year the market price of the share increased from Rs 222 to Rs 330 per share. Only Six years has passed since it was listed at the stock exchange but its share has reached very high market value.
This is because it is subsidiary of US multinational so it is well managed and futuristic in business strategy.
During the SPLY it had posted loss simply because of restructuring cost. During the HY 2003-04, the period under review the company registered sales at Rs 656.49 million compared to Rs 751.77 million posted in the same period of 2003. Gross Profit declined to Rs 198.26 million as compared to Rs 246.70 million posted in the SPLY. Sales declined by 12.7% where as gross profit went down more steeply by 19.6%.
The margins were under pressure. The directors informed that sales were lower during the first half mainly on account of change in selling strategy for its Dextrose portfolio, with focus on Glaxosed-D in the last quarter of the year instead of 1st quarter of the year.
The gross margin was slightly less than last year due to provisions against expired, obsolete and redundant stocks. The directors feel encouraged as their brand focused categories registered satisfactory results.
Introduction of new flavours has helped to extend Energile demand beyond peak summer season. Knorr portfolio is being strengthened and sales continue to grow.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                  June 30  December 31

                                     2004         2003

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Share Capital-Paid-Up:              61.58        61.58

Reserves & Profit:                 424.86       442.46

Shareholders Equity:               486.44       504.04

Current Liabilities:               418.07       492.49

Tangible Fixed Assets:             134.64       152.51

Intangible Fixed Assets:           187.50       193.86

L T Loans:                           0.10         0.11

L T Prepayments:                     2.63            -

Deferred Taxation:                  23.59         2.47

Current Assets:                    556.05       647.58

Total Assets:                      904.51       996.53

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Profit & Loss A/c For the

 Half Year Ended June 30             2004         2003

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Sales:                             656.49       751.77

Gross Profit:                      198.26       246.70

Other Income:                        2.58         6.42

Financial (Charges):                (2.73)      (9.22)

Restructuring Cost:                     -        48.47

Profit/(Loss) Before Taxation:      22.92      (22.62)

Profit/(Loss) After Taxation:       13.18      (20.64)

Earnings/(Loss) Per Share (Rs):      2.14       (3.35)

Interim Dividend @ 50% (2003 Nil):  30.79            -

Share Price (Rs) On 6/12/04:       265.00            -

Price/Earning Ratio:                 1.24            -

Book Value Of Share (Rs):           78.99        81.85

Debt/Equity Ratio:                  0:100        0:100

Current Ratio:                       1.33         1.31

Gross Profit Margin (%):            30.20        32.82

Net Profit Margin (%):               2.01       (2.74)

R O A (%):                           1.46       (2.07)

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