National Foods Reports Downturn in FY24 Earnings Despite Growth in Retail Sector

Karachi: National Foods Limited (NATF) experienced a significant downturn in its FY24 financial results, primarily due to a decline in its core business, despite notable growth and profitability in its retail segment. The company reported consolidated earnings of PKR 1.9 billion, a sharp decline from the PKR 3.2 billion recorded in FY23.

According to AKD Securities Limited, NATF’s core business, which includes traditional food and related products, saw revenues increase by 25% year-on-year to PKR 38 billion. However, rising commodity prices and inflationary pressures led to a substantial decrease in core business profitability, down 75% to PKR 0.56 billion from PKR 2.2 billion in FY23. The company’s FY24 financial struggles were also impacted by a 136% increase in finance costs due to significant investments, including a new PKR 7 billion manufacturing plant in Faisalabad.

Despite challenges in the core segment, NATF’s retail arm, anchored by its acquisition of the Canadian retail chain A1 Cash and Carry, showcased impressive growth. The retail segment’s earnings rose by 42% to PKR 2.2 billion, with operating profitability improving by 45%. This success is attributed to the company’s strong market presence in Canada, expansion to seven stores, and a diverse product assortment of 12,000 SKUs across nine categories.

Additionally, NATF maintained a 59% market share in major product categories such as ketchup. The company also initiated a ‘Seed-to-Table’ project, cultivating tomato seeds across 500 acres in Sindh, yielding 8,000 tons of premium-quality tomatoes aimed at reducing dependency on imported tomatoes. The newly inaugurated Faisalabad plant, located in a Special Economic Zone, is expected to ensure volumetric growth and provide future tax benefits with a production capacity of 6k tons per month.

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