Unity Foods Limited Reports FY24 Net Loss Amid Drop in Edible Oil Sales

Karachi: Unity Foods Limited (UNITY) has reported a net loss of Rs3.4 billion for the fiscal year 2024, primarily attributed to a significant decline in the sales of edible oil and its derivatives. The company’s financial performance was further impacted by the influx of imported oil in the market and prevailing inflationary pressures.

According to JS Global, the corporate briefing conducted today revealed that Unity Foods experienced a 40% reduction in the production of edible oil and feed during FY24. In response to these challenges, the company enhanced its oil refining capacity by 41% with the addition of a 300-ton per day line and expanded its flour capacity by 18% by incorporating a 400-ton per day line.

In an effort to mitigate risks associated with the edible oil business, Unity Foods’ management expressed intentions to diversify its product portfolio and shift towards value-added products. The revenue contribution from edible oil decreased to 48% in FY24 from a 73% share in FY23, while contributions from the Sunridge brand increased to 27% from 11% in the previous fiscal year.

The company’s retail operations include seven company-owned Sunridge Mart & Bakeries and four Shop-in-the-shop outlets, with plans to expand further in the Punjab region, particularly in Lahore.

During the first quarter of FY25, Unity Foods reported a 34% quarter-on-quarter increase in revenues and an improvement in gross margins from 4% in the fourth quarter of FY24 to 14% in the first quarter of FY25. This recovery, along with reduced financial charges, enabled the company to achieve a positive bottom line, with earnings per share standing at Rs0.07, compared to a loss per share of Rs0.55 in the same period last year.

Looking ahead, the management anticipates that a decline in inflation and interest rates will foster consumer demand and enhance the company’s profitability. Additionally, rising urbanization levels are expected to boost the sale of branded commodities, particularly rice and wheat, within Pakistan. However, on the export front, the lifting of the rice export ban by India is expected to affect overall pricing and the export of rice from Pakistan.

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