National Foods Limited (PSX: NATF) reported a significant decline in Fourth Quarter profitability, marking a 33% YoY in Profit After Tax to mere PKR 284mn in 4QFY23 compared to PAT of PKR 423.6mn in 4QFY22.
The significant reduction in Quarterly Profit is attributed to 95% YoY increase in Admin Cost to PKR 563mn, while Finance Cost also rose to PKR 209mn compared to Net Finance Income of PKR 1.6mn in 4QFY22.
Sales growth in 4QFY23 remained muted at 11%YoY to PKR 7.78bn. While Gros Margin percentage declined to 30.8% from 32.8% in same period last year.
NATF’s Other income also marked significant decline of 60 percent to PKR 143mn compared to PKR 355mn in same period last year.
The financial result for the Quarter remained dismal and lower then the Market Expectations
However, on Full year basis, company achieved after-tax profit of Rs3.83 billion, resulting in an earnings per share (EPS) of Rs13.78. This substantial growth surpassed the previous year’s profit of Rs2.72 billion and an EPS of Rs10.4.
There was substantial boost in sales, which rose by an impressive 41.29% year-on-year, reaching Rs64.32 billion compared to Rs45.53 billion in FY22.
Alongside these results, the company also declared a final cash dividend for the fiscal year ending on June 30, 2023, at Rs2.5 per share, equivalent to 50%.
The cost of sales also increased by 41.73% YoY but was less than proportionate to the sales increase, leading to a 40.17% YoY improvement in gross profit, which reached Rs18.19 billion in FY23.
During the review period, other income increased by 41.18% YoY to reach Rs912.12 million in FY23 compared to Rs646.06 million in the same period of the previous year.
On the expense side, the company experienced a 33.41% YoY increase in selling and distribution costs, while other expenses decreased by 2.09% YoY to reach Rs9.91 billion and Rs297.78 million, respectively, during the review period.
The company’s finance costs surged by 2.5 times YoY, standing at Rs1.16 billion compared to Rs463.81 million in FY23, primarily due to higher interest rates.
Regarding taxes, the company paid higher taxes amounting to Rs1.17 billion compared to Rs897.93 million in the corresponding period of the previous year, reflecting a YoY increase of 30.69%.
| FY2023 | FY20233 | YoY Change | 4QFY23 | 4QFY22 | YoY Change | |
| Sales – net | 29,602,876 | 26,843,062 | 10% | 7,786,039 | 7,001,802 | 11% |
| Cost of sales | -19,360,522 | -17,875,419 | 8% | -5,379,490 | -4,702,547 | 14% |
| Gross profit | 10,242,354 | 8,967,643 | 14% | 2,406,549 | 2,299,255 | 5% |
| Selling and distribution costs | -5,642,096 | -5,191,846 | 9% | -1,509,875 | -1,693,061 | -11% |
| Administrative expenses | -1,865,221 | -1,381,167 | 35% | -563,074 | -289,305 | 95% |
| Other expenses | -296,174 | -305,493 | -3% | -51,772 | -159,358 | -68% |
| Other income | 884,472 | 672,419 | 32% | 143,277 | 355,489 | -60% |
| 3,323,335 | 2,761,556 | 20% | 425,105 | 513,020 | -17% | |
| Finance costs | -621,391 | -180,309 | 245% | -209,065 | 1,612 | -13069% |
| Profit before taxation | 2,701,944 | 2,581,247 | 5% | 216,041 | 514,632 | -58% |
| Taxation – net | -513,904 | -616,169 | -17% | 67,947 | -91,029 | -175% |
| Profit for the year | 2,188,040 | 1,965,078 | 11% | 283,988 | 423,603 | -33% |
| Earnings Per Share | 9.39 | 8.43 | 1.22 | 1.82 |
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