Mitchells Fruit Farms Limiited (PSX: MFFL) has the privilege to be one of the oldest corporations in Pakistan with an extensive history in the food sector. With its own farms, it is a fully integrated company. While over 80 percent of the sales come from the domestic market, it is also a serious player in the export sector with export portfolios in Middle-East, South-West Asia, Europe and North America.
The company has two product categories: grocery products and confectionary products. Grocery range includes over 100 products in jam and jellies, squashes and syrups, ketchups and sauces, canned food, fruit drinks, pickles and vinegar, etc. The confectionery product range includes a total of 32 products in chocolate and sugary confectionary. MFFL has over 20 percent of market share in jam and spread sector.
The firms revenues in the first quarter ending December 2016 has seen a significant jump on a year-on-year basis. This is a good sign for the company that has seen a decline in the revenues in the last couple of years primarily due to consolidation in its product line. Back in 2014, Mitchells discontinued the production of its low-margin products, specifically low price confectionery items.
The firm has in the past couple of years has made two major investments in Fruit Pulping Line and Coal fired boiler, which have paid off. While revenues have declined, the firms earnings have remained on the growth side. In its first quarter 2016-17 as well, margins have improved. While lower input cost has boosted the bottomline, higher distribution and marketing costs have restricted the earnings growth that was over 11 percent year-on-year for the food processing firm.
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