AKD Research - Off the Analyst's Desk

January 24, 2014

EFOODS: CY13 result review

EngroFoods(EFOODS)announceditsfullyearCY13resulttodaywhereinonanunconsolidatedbasis,the companyposteddismalearningsofPkR210.96mn(EPS:PkR0.28)comparedtoearningsofPkR2.6bn(EPS: PkR3.39)infullyearCY12adeclineof91.8%YoY. ThesubstantialdeclinecameaboutduetooneoffswhereEFOODSrecordedalossofPkR673mnarising fromcashlossesofEngroFoodsNetherlandsB.V.(100%subsidiarywithtakeovercompletedonDec 1613).Moreover,thecompanyalsobookedsalestaxfortheperiodJul1313Jul1813amountingto PkR208mnwhendairyproductswereclassifiedasGSTexempt. AdjustingfortheaboveresultsinrecurringearningsofPkR1.1bn(EPS:PkR1.43)infullyearCY13,a declineof57.9%YoY.4QCY13recurringearningsclockedinatve148.1mn(LPS:PkR0.19). Correctivestepsundertakenbythemanagementforthecompanysdistributionissuesarelikelytostart depictingresultsnextquarter.ForfullyearCY14,weexpectEFOODStobebackonagrowthpathwith earningsof~PkR2.0bn(EPS:PkR2.6).
Usman Zahid
Deputy Head of Research usman.zahid@akdsecurities.net AKD Securities Limited 6th Floor, Continental Trade Centre, Block 8, Clifton, Karachi, Pakistan. Landline No: (9221) 111-253-111 Ext: 643

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