Al Shaheer Foods

Al Shaheer Foods, established in 2008, stands today as one the major meat exporters of Pakistan. Under its name, ASC owns two brands, namely Meat One which came into being in 2010, and Khaas which commenced in 2014. In 2014, it was listed on the stock exchange, and renamed itself from Al Shaheer Corporation to Al Shaheer Foods in 2017. It primarily exports to the Middle East. Pakistan's total value of meat exports in FY19 was approximately $163 million according to International Trade Centre (ITC). Shareholding pattern A major shareholder of Al Shaheer is Mr. Kamran Khalili the CEO of ASC who holds 24.2 percent. Collectively, 13.92 percent is held by a multitude of mutual funds, whereas 3.81 percent is held by banks, DFIs, NBFCs, and insurance companies and 3.36 percent by public sector companies and corporations. General public holds over 42 percent shares in the company. Latest financial performance Sales of Al Shaheer Foods constitute exports, retail of Meat One and Khaas, sales through delivery and e-commerce, and last, but not the least, through their professional line, which includes providing meat to various institutions such as airlines, restaurants, cafeterias at offices and educational institutes, etc. However, in the past three years ASC has seen a continuous decline in its top-line from FY17 to FY19. Their exports, in FY19, plunged by 7 percent year-on-year owing to several macroeconomic factors, which affected the business in terms of both, volume and value. Before Al Shaheer Corporation could benefit from export favourable exchange rate, other meat exporting countries devalued their currency early, allowing for cheaper alternatives, hence creating a negative impact on the meat exports of Pakistan. Al Shaheer Foods' top-line experienced a downward trend since the past two years. As per the company's CEO, Mr. Kamran Khalili, the 16 percent fall in sales in FY18 was due to immense competition faced in the international market from other meat exporting countries; the latter devalued their currencies prior to Pakistan, hence gaining advantage by providing cheaper products in the market, causing a setback to ASC's sales, which are largely made up of exports. In FY19, the 22 percent decline in sales was mostly volumetric; the company's cash flow was affected due to previously incurred losses combined with the undergoing expansion, which reduced their ability to purchase livestock. Their consistently reducing liquidity can be seen from a healthy current ratio of 2.29 in 2015 to 0.99 in 2019. On the domestic front, the company continues to face competition from the unorganised sector. However, in the future, according to Mr. Kamran Khalili, this will not be a viable threat, since he says the consumers are gradually making a conscious decision to source hygienic meat. The increase in the company's FY19 profits was mainly driven by the increase in its 'other income' which essentially comprises of a net exchange gain. Net exchange gain is explained by the positive exchange rate gap created by the difference in time the sale was made and the time the payment was received for it.

According to the company's reports, a lot of their stabilisation and command over profits has been achieved through rigorous cost controls, enhancing efficiency and shutting down loss-making outlets of both their brands. This allowed them to focus more and channel their resources towards profit making shops which showed greater financial viability. As part of their attempt to make business profitable, Al Shaheer Foods stopped doing business with customers who were unwilling to pay for high quality products.

Future outlook 2019 was a particularly grueling year for Al Shaheer Foods, as it attempted to recover from losses from two consecutive years, amidst unfavourable business environment. The company, in future, plans to diversify its offerings by adding poultry and processed food to its portfolio. In fact, the poultry and processed food plant, set up in Lahore, is near completion. However, its launch has been postponed as of now to focus their resources on making running businesses fruitful. The loss incurred previously has naturally affected the company's cash flow. This, in turn, adversely affected their ability to purchase livestock, as aforementioned. Hence, majority of the sales revenue was price driven due to export favourable exchange rate. Moreover, Al Shaheer reduced clientele in order to cater to advantageous customers; in future, it hopes to win back lost customers on the basis of confidence on company's history with them. Lastly, as with any business, it will time to recuperate; the business's ability can be gauged with the way they aggressively dealt with losses and managed a net profit by the year end.