Al Shaheer Corporation Limited Financial Performance
Al Shaheer Corporation Limited (ASC) posted financial performance of PKR 5m (EPS: PKR 0.03) for 2QFY17 against earnings of PKR 101m (EPS: PKR 0.75) for corresponding period last year. In the analyst briefing held yesterday, the management proclaimed that the chief reason for lower earnings was decline in export sales which suffered due to both volume loss and margins attrition of Al Shaheer Earnings. On upcoming projects, the management divulged that the poultry slaughtering line is on schedule and expected to come online in mid-2017 while frozen fruits and vegetables segment would commence in early 2018. The company also confirmed its backward vertical integration plan of setting up a farm for supply of livestock to its meat slaughtering business.
Subdued export sales curtailed profits.
Al Shaheer financial performance
For 2QFY17, sales revenue of ASC fell by 7% YoY and 1% QoQ to PKR 1,519m. Meat exports, which generate more than half of the sales for the company, increased in value by 11% over the previous quarter despite stiffer competition from Fauji Meat. However, the overall decline in GCC meat market demand kept export volume subdued as compared to last year. For 1HFY17, sales mix for the company turned out to be 64%/18%/5%/13% vs. 72%/12%/4%/12% in 1HFY16 for exports/Meat One/Khaas Meat/B2B. On export segment, the management further disclosed that margins shrank considerably due to increase in local livestock cost coupled with overvalued rupee which made Pakistani meat uncompetitive relative to other countries.
However, going forward, the management expects strong rebound in exports and domestic sales with increase in volumes as well as better margins as the company strives to improve its process and achieve efficiencies in various areas of business.
New business lines to be set up soon
Al Shaheer financial performance expects its poultry line to get operational by mid-17 with a capacity of 6 MT/hr of meat. As per the management, lift of poultry ban in UAE and other markets like Kuwait and Oman will likely give ASC easy penetration in untapped market of hand slaughtered chicken. Moreover, its frozen fruits and vegetables facility in Lahore is expected to come online in early 2018 with a capacity of 4 MT/hour. The company also confirmed its plan of backward vertical integration through pursuing a livestock farm facility for smooth input supply to its meat slaughtering business which will take another year to be fully set up.