Unity Foods Limited (UNITY) posted un-consolidated quarterly profits of Rs1.1bn during 2QFY22. This translates into a diluted EPS of Rs 0.93 as compared to Rs0.78 in the same period last year (SPLY).

Net revenues of the company witnessed a record high figure of Rs20bn (up 17% YoY and 22% QoQ) which is mainly led by significant growth in Edible Oil segment where major contribution came from Palm Oil category followed by Soft Oil (Seed Crushing Oil).

Gross margins of the company stood at 11% during 2QFY22 against 9% and 7% in 2QFY21 and 1QFY22, respectively. The major reason behind surge in margins is inventory gains as the company’s oil procurement price was quite low.

Selling and Distribution expense were down 38% YoY whereas admin expense surged to Rs172mn in 2QFY22 vs. Rs84mn in 2QFY21.

The company reported exchange loss of Rs414mn in 2QFY22 as against the exchange gain of Rs203mn in SPLY. This is attributable to foreign currency denominated trade payables.

Finance cost increased by 100% YoY to Rs377mn due to rise in short term borrowing, Letter of Credit opening charges and Bank charges.

1HFY22 un-consolidated earnings were down 29% to Rs1bn (diluted EPS: Rs0.91) as first quarter recorded loss of ~Rs28mn (diluted LPS: 0.02).

Courtesy- Topline Securities