THE Al-Shaheer Corporation held a briefing for analysts last Thursday where it discussed its financial performance in fiscal year 2015. The company posted its first results since going public a few months back.
Al-Shaheer recorded net earnings of Rs197m in the year. This was based on revenues of Rs5bn, which were up 12pc from Rs4.4bn in the same period last year. Moreover, its gross margins jumped by 4.3pc to 16.5pc on the back of rising revenue from the high-margin domestic market.
Currently, 76pc of the company’s revenues are earned from exports, while the local meat segment accounts for 24pc. The company’s brands ‘Meat One’ and Khass generate around 24pc and 3pc of revenues respectively.
The company booked a one-time tax reversal of Rs29m in FY15. Just to highlight, in the FY16 budget, the government declared a tax holiday of four years for new ‘Halal’ meat producers who set up their facilities and acquire ‘Halal certificates’ by December 2016. These firms’ incomes from exports would also be taxed at a favourable rate of 1pc.
The company recently signed an MoU with the government’s Canteen Stores Department to open Khass outlets with the ‘first right of refusal’. Currently, two outlets of ‘Khass’ are operational within 106 CSD outlets
In FY15, the company expanded its Meat One outlets from 14 to 24. The management is targeting 175 Meat One outlets and 500 Khaas outlets by 2025. Al-Shaheer’s management is targeting opening retail outlets in 20 cities in the country and the top 10 countries in the GCC region.
Recently, it signed a MoU with the government’s Canteen Stores Department (CSD) to open Khass outlets with the ‘first right of refusal’. Currently, two outlets of ‘Khass’ are operational within 106 CSD outlets.
The company also plans to reduce its reliance on exports and lower margin and to focus on the domestic market. Its gross margins on exports amount to 15pc while those on the domestic market come to around 20pc.
And in keeping with its vertical integrated planning, the company’s feed-stock facility will be operational by next month.
This facility will produce one tonne of feed-stock to feed 26,000 animals, which will be more than sufficient to feed the 4,000 animals in its farmhouse.
Its poultry project, located on 12 acres of land in Raiwand, Lahore, is 70pc complete and is expected to come online by March 2017.
The company is planning to process and utilise the byproducts of animals for the making of animal feed, in waste production lines and pet foods manufacturing plants (a very low cost machinery). ‘Wet blue treatment hides’ would be utilised for keeping the hides safe for the next processing, offal processing and exports.
The company is also planning to explore the high-margin frozen and ready-to-cook food segment, since it believes it will be in the right position to promote the new segment in its existing retail outlets.
Courtesy: Hasan Azhar, Taurus Securities
Published in Dawn, Business & Finance weekly, October 12th, 2015
On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play
Dear visitor, the comments section is undergoing an overhaul and will return soon.