United Brands Limited (PSX: UBDL) was incorporated in Pakistan in 1965 as Batlay Match Industries Limited.
The company rebranded itself as UDL Industries Limited in 1987 and consequently as United Brands Limited in 2006. UBDL is the subsidiary of International Brands Limited.
The company is engaged in the trading and distribution of consumer goods and allied products. Its portfolio includes baby products, beverages, cereals, deodorants, dairy products, confectionaries etc.
Pattern of Shareholding
As of June 30, 2025, UBDL has a total of 91.80 million shares outstanding which are held by 1107 shareholders. International Brands Limited, the parent company of UBDL, has the majority stake of 96.08 percent in the company followed by local general public holding 3.23 percent shares. The remaining ownership is distributed among other categories of shareholders.
Historical Performance (2019-25)
Except for a rise in 2019 and 2025, UBDL’s net sales have descended over the period under consideration. The company posted net profit only in 2021. Its gross margin which hovered slightly above 25 percent until 2020, stayed close to 15 percent for the next three years.
In 2024, UBDL’s gross margin considerably strengthened, however, fell to its lowest level in 2025. The company’s operating margin slumped to negative in 2019. It then posted positive values in 2020 and 2021 only to fall back in the negative territory in the subsequent years (see the graph of profitability ratios). The detailed performance review of each of the years under consideration is given below.
In 2019, UBDL’s topline grew by 7.20 percent year-on-year to clock in at Rs. 4048.62 million. This was primarily the result of service income generated from warehousing and transportation services provided by the company.
During the year, UBDL discontinued the brands Mars, Wrigley, Haleeb Foods, Heinz, IFFCO and Johnson & Johnson from its portfolio. Cost of sales hiked by 8.14 percent year-on-year in 2019 which was the effect of Pak Rupee depreciation, higher utility cost, fuel price hike as well as increase in the global commodity prices.
Gross profit grew by 4.54 percent year-on-year in 2019; however, GP margin tumbled from 26 percent in 2018 to 25.40 percent in 2019.
Operating expense spiked by 21.54 percent year-on-year in 2019 on account of higher bond charges, advertisement & promotion expense as well freight and vehicle running expense incurred during the year. Payroll expense also hiked in 2019 although UBDL streamlined its workforce from 520 employees in 2018 to 206 employees in 2019.
Other expense registered an overwhelming increase of 943 percent in 2019 on account of loss incurred on discontinuation of business arrangement particularly with Johnson & Johnson. This resulted in operating loss of Rs.47.10 million in 2019 versus operating profit of Rs.253 million recorded in 2018.
Finance cost escalated by 155.87 percent in 2019 on account of increased borrowings and higher discount rate. Larger debt as well as reduced equity due to higher accumulated losses culminated into gearing ratio of 80 percent in 2019 versus gearing ratio of 42 percent posted in 2018. UBDL incurred 1782.36 percent higher net loss to the tune of Rs.549.91 million in 2019 which translated into loss per share of Rs.5.99 versus loss per share of Rs.0.56 registered in 2018.
In 2020, UBDL’s net revenue slid by 19.22 percent year-on-year to clock in at Rs,3270.64 million. UBDL discontinued some more imported business lines and transferred its transportation and warehousing business to IBL Logistics (Private) Limited, a subsidiary company. The impact of COVID-19 also came into play and took its toll on the demand of company’s products.
Cost of sales plunged by 19.36 percent year-on-year due to decline in company’s goods business as well as discontinuation of its services business. Gross profit also shrank by 18.79 percent year-on-year in 2020 while GP margin stayed afloat.
Operating expense declined by 17.27 percent year-on-year in 2020 primarily due to lower advertisement & promotion expense, curtailed freight charges and no demurrages incurred during the year. Payroll expense also declined as the number of employee fell to 160 in 2020.
During the year, the company booked loss allowance worth Rs.27.13 million on trade receivables, up 5305.18 percent year-on-year on account of deteriorating economic backdrop due to COVID-19.
During the year, UBDL also booked provision worth Rs.138 million on damaged and expired items of Johnson & Johnson and Kellogg’s, however, unlike last year, there was no loss incurred on the discontinuation of business arrangements. This resulted in 35.89 percent slide in other expense in 2020.
Other income rose by 2427.33 percent in 2020 on account of scrap sales and group relief under which UBDL surrendered its taxable loss worth Rs.53.25 million to its associated company, The Searle Company limited. As a consequence, the company was able to report operating profit of Rs.9.87 million in 2020 with OP margin of 0.30 percent.
Finance cost tumbled by 57.62 percent in 2020 on account of lesser borrowings as well as exchange gain recognized during the year.
Although the company’s outstanding debt contracted in 2020, thinner equity due to escalating accumulated loss translated into gearing ratio of 93 percent in 2020. UBDL sustained net loss of Rs.255.68 million in 2020, down 53.51 percent year-on-year with loss per share of Rs.2.79.
UBDL’s net revenue further shrank by 21.92 percent to clock in at Rs. 2553.67 million in 2021. This was on account of discontinuation of certain business arrangements and change of business model from imported products to local products which have lower margins. This resulted in a considerable 55.54 percent decline in its gross profit with GP margin drastically falling to 14.54 percent in 2021.
Operating expense dived down by 53.51 percent year-on-year in 2021 as the company no longer had to incur international freight charges because it switched to local accounts. Advertisement and promotion expense also massively fell during the year owing to decline in amortization of short-term prepayments of marketing for Red Bull products.
Lower provisioning for expired and damaged products squeezed other expense by 68.15 percent in 2021. Other income buttressed the financial performance of UBDL as it climbed up by 88.35 percent in 2021 on the back of higher scrap sales as well as exchange gain. UBDL’s operating profit picked up by 802.48 percent in 2021 with OP margin rebounding to 3.50 percent.
Finance cost plummeted by 66.86 percent in 2021 due to monetary easing and lower external borrowings. Gearing ratio fell to 80 percent in 2021. UBDL was able to post net profit of Rs.3.73 million in 2021 with EPS of Rs.0.04 and NP margin of 0.15 percent.
In 2022, UBDL’s net revenue ticked down by 7.58 percent year-on-year to clock in at Rs. 2360.09 million. This was due to the discontinuation of Hayat Kimya business. Shrinkage of business operations also squeezed the cost by 7.61 percent in 2022 resulting in 7.42 percent thinner gross profit recorded in 2022. However, GP margin stayed at 14.6 percent.
Operating expense inched up by 5.43 percent year-on-year in 2022 due to higher payroll expense, vehicle running expense, advertisement expense as well as freight charges on account of higher inflation and prices of POL products. Other expense slid by 73.29 percent in 2022 due to lower provisioning for expired and damaged stock.
Other income also eroded by 86.82 percent year-on-year in 2022 due to lower scrap sales, no group relief, no exchange gain and severance payment made during the year.
UBDL registered operating loss of Rs.8.56 million in 2022. The company was able to trim down its finance cost by 19.30 percent in 2022 despite monetary tightening. This was due to reduced borrowings, however negative equity of Rs.10.56 million squeezed company’s capital and hence gearing ratio magnified to 107 percent in 2022.
UBDL posted net loss of Rs. 65.62 million in 2022 with loss per share of Rs.0.71.
UBDL’s topline registered a drastic 42.88 percent downfall to clock in at Rs. 1348.03 million in 2023.
Import restrictions imposed by the government to keep a check on the dwindling foreign exchange reserves of the country tremendously affected the remaining imported business lines of the company particularly Ovaltine, Kellogg’s and Pringles. While service revenue increased due to addition of new brand “Mondelez” in the transportation business and increase in routes to Lahore beverage business, however, it couldn’t produce much of a difference in UBDL’s topline.
Gross profit shrank by 41.71 percent year-on-year in 2023 while GP margin slightly improved to clock in at 14.86 percent in 2023. Operating expense slumped by 35 percent year-on-year in 2023 on account of cost control initiatives to minimize the impact of high inflation and fuel charges.
Other expense magnified by 103.44 percent in 2023 due to higher provisioning done for expired and damaged stock pertaining to Johnson & Johnson, Kellogg’s and Ovaltine.
Other income improved by 25.67 percent in 2023 on account of insurance claim. UBDL registered 366.76 percent higher operating loss of Rs.39.94 million in 2023. To add to ado, finance cost mounted by 44.98 percent in 2023 on account of higher discount rate and exchange loss. Gearing ratio surged to 321 percent in 2023.
The company posted net loss of Rs.98.28 million in 2023, up 49.76 percent year-on-year. This translated into loss per share of Rs.1.07 in 2023.
In 2024, UBDL recorded 16.85 percent erosion in its net sales which clocked in at Rs.1120.84 million. Import restrictions set by the government made the company take a strategic exit from its distribution lines including Kellogg’s, Ovaltine and Pringles.
Cost of sales also dropped by 19.37 percent in 2024 owing to adjusted business scale and cost control measures put in place by the management. While gross profit shrank by 2.43 percent in absolute terms in 2024, GP margin significantly improved to clock in at 17.44 percent. Operating expense nosedived by 5.12 percent in 2024 predominantly due to reduced freight and cartage, vehicle running & maintenance charges as well as payroll expense.
The company further downsized its workforce from 230 employees in 2023 to 158 employees in 2024. Other expense plunged by 92.18 percent in 2024 due to lesser provision booked for expired and damaged stock.
Other income also slid by 15.48 percent in 2024 as no insurance claim and scrap sales were made during the year. The company recorded operating loss of Rs.13.69 million in 2024, down 65.71 percent year-on-year.
Finance cost plummeted by 31.96 percent in 2024 due to considerable decline in the outstanding short-term borrowings as well as lesser exchange loss incurred during the year.
Negative capital of the company owing to surging accumulated losses resulted in gearing ratio of -0.16 percent in 2024. UBDL recorded net loss of Rs.58.99 million in 2024, down 39.98 percent year-on-year. This culminated into loss per share of Rs.0.64 in 2024.
After five years of decline, UBDL’s topline registered an uptick of 5 percent to clock in at Rs. 1176.76 million in 2025. This was because of expansion in the customer range. Revenue from trading stock was the only contributor of higher revenue in 2025.
Conversely, revenue from manufactured goods slid while revenue from services as commission agent was discontinued since the prior year. Cost of sales hiked by 9.57 percent due to elevated energy cost and inflationary pressure. This resulted in 16.71 percent shrinkage in gross profit in 2025 with GP margin falling down to its lowest level of 13.84 percent. Operating expense plunged by 17.25 percent in 2025 due to lower advertising & sales promotion, vehicle running expense as well as repair & maintenance charges incurred during the year.
Loss allowance booked on trade receivables surged by 341.70 percent in 2025. Other expense also escalated by 1154.13 percent in 2025 due to increased provisioning done for expired and damaged stock. Other expense, to a great extent, was offset by 43.44 percent higher other income recorded in 2025 on the back of liabilities no longer payable written back during the year.
UBDL recorded 260.80 percent spike in its operating loss which was recorded at Rs.49.40 million in 2025. Finance cost plummeted by 46.39 percent in 2025 due to monetary easing and reduction in outstanding liabilities. UBDL recorded net loss of Rs.70.447 million in 2025, up 19.42 percent year-on-year. This translated into loss per share of Rs.0.77 in 2025.
Recent Performance (9MFY26)
During the nine-month period of the ongoing fiscal year, UBDL’s net sales deteriorated by 80.87 percent to clock in at Rs.208.646 million. This was the result of discontinuation of certain loss-making business lines to focus on lucrative segments.
Cost of sales shrank by 79.68 percent in 9MFY26. This resulted in 88 percent shrinkage in gross profit in 9MFY26 with GP margin clocking in at 9 percent versus GP margin of 14.33 percent registered in 9MFY26. Curtailment of business operations resulted in 76 percent fall in operating expense in 9MFY26.
No other expense was recorded during the period under review.
Conversely, other income mounted by 418.10 percent to clock in at Rs.17.37 million in 9MFY26. This might be due to liabilities written back during the period. UBDL posted operating profit of Rs.16.066 million in 9MFY26, up 99.26 percent year-on-year.
Finance cost slid by 73.77 percent in 9MFY26 due to monetary easing and effective liquidity management. UBDL posted net profit of Rs.9.941 million in 9MFY26 versus net loss of Rs.12.65 million registered in 9MFY25. EPS was recorded at Rs.0.11 in 9MFY26 versus loss per share of Rs.0.14 recorded in 9MFY25. NP margin clocked in at 4.76 percent in 9MFY26.
Future Outlook
The shrunken pockets of consumers on account of sustained period of high inflation have shifted their focus from imported to local products.
The company has also aptly modified its sales mix in favor of local products; however, these products have lower margins. Furthermore, fluctuating pricing tariffs, increased taxation particularly on non-essential items, higher utility and labor cost pose dire challenges to the company.
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