Roshan Packages Limited (RPL) held its corporate briefing session today to discuss FY24 financial results and provide insights on the future outlook. Key takeaways from the call are as follows:
- Roshan Packages Ltd reported revenues of PkR10.3bn in FY24, reflecting a modest increase of 0.85% YoY. However, NPAT grew by 41% YoY to clock in at PkR211mn (EPS: PkR1.49) during the year. The increase was led by higher other income of PkR271mn (up 85% YoY), majorly led by interest income from wholly owned subsidiary ‘Roshan Sun Tao Paper Mills Ltd.’
- Production from corrugated/flexible facilities stood at 29.7k/5.4k tons during FY24, standing down by 15%/0.8% compared to the preceding year.
- The company’s corrugated/flexible packaging production capacity stands at 60,000/12,240 tons annually.
- The company experienced compression in gross margins during FY24, which declined from 9.9% in FY23 to 8.6% in FY24. The decrease is primarily attributed to escalating raw material and other input costs.
- RPL has transitioned its corrugation plant towards solar energy, reducing carbon emissions by approximately 0.85kg of CO2 per kwh of solar electricity generated. Additional solar installations are also underway at the flexible packaging facility.
- The total power consumption for corrugated/flexible packaging is 2.0/1.5MW.
- Pakistan’s total corrugated packaging market is estimated at 1.50 million tons, of which half remains undocumented. RPL holds a market share of 7-8% within the sector.
- Roshan Suntao Paper Mill Pvt. Ltd (currently under construction) will require 5-6MW of power with a projected annual capacity of 100k tons. The capacity will produce raw material for the corrugated division, and the project will also benefit from a 10-year tax holiday.
- RPL management advocates for the formal recognition of packaging as an industry. This recognition is essential to regulating the sector, bringing accurate and comprehensive statistics to the forefront, and effectively addressing both local and export market demands.
- Improving economic activity amid declining interest rates should keep the company in focus. Additionally, recent discussions on formally recognizing packaging as a sector adds as another positive catalyst. However, the scrip is not covered by our formal coverage.
Courtesy – AKD Research
