§  UNITY announced its 4QFY24 result recently, where the company recorded loss of Rs2.17bn (LPS of Rs1.82), compared to profit of Rs1.25bn (EPS of Rs1.04) in 4QFY23. Higher than expected loss is due to lower-than-expected sales and gross margins.

§  Net Sales in 4QFY24 decreased by 39% YoY and by 40% QoQ to Rs13.75bn. The decline in sales is due to lower volumetric sales in the edible oil and animal feed segment. According to channel checks, another reason for lower sales is a decline in the prices of Wheat Flour in the country.

§  To recall, the average price of Wheat flour (20 KG) in 4QFY24 stood at Rs2,030, compared to Rs2,779 in 3QFY24 and Rs2,630 in 4QFY23, according to PBS data.

§  Majority of export sales of UNITY were recorded in 9MFY24, contributing to lower 4QFY24 sales.

§  Gross margins in 4QFY24 stood at 4.1% compared to 17.7% in 4QFY23 and 7.8% in 3QFY24. According to channel checks, the margin declined due to inventory losses in the Edible oil and wheat segment.

§ International palm oil was higher than the local edible oil selling prices due to high local inventory, which led to negative price parity.

§  In FY24, UNITY recorded loss of Rs3.4bn compared to earnings of Rs675mn in FY23. The primary reason for the loss was the increase in finance costs, which rose by approximately 1.1x to Rs7.4bn in FY24.

§  Gross margins in FY24 stood at 8.7% compared to 13.7% in FY23.

§  Other income for the company increased by 1.6 times to Rs1.76bn. The increase in other income was due to an exchange gain of Rs667mn in FY24 compared to an exchange loss of Rs7.49bn in FY23. Income from financial assets also increased to higher interest rates.

§  Alongside the result,  the company did not announce any payout in FY24.

Courtesy – Topline Pakistan Research