Barkat Frisian Agro Limited

Barkat Frisian Agro Limited (PSX: BFBIO) was incorporated in Pakistan as private limited company in 2017. It was previously known as Barkat Frisian Pasteurized Egg Company. The company converted into a public unlisted company in December 2024 while the listing of its shares on the PSX was held in March 2025. The company is engaged in poultry egg processing.

Pattern of Shareholding

As of June 30, 2025, BFBIO has a total of 309.990 million shares outstanding which are held by 7530 shareholders. Associated companies, undertakings and related parties have the majority stake of 64.86 percent in the company. These include B&Z Enterprise (Private) Limited and Frisian Egg International B.V. Directors, CEO, their spouse and minor children account for 13.29 percent shares of the company while local general public hold 12.76 percent shares.

Around 3.57 percent of BFBIO’s shares are held by Modarabas & Mutual Funds and 3.30 percent by Joint Stock Companies. The remaining shares are held by other categories of shareholders.

Historical Performance (2025)

In 2025, BFBIO recorded 19.42 percent year-on-year increase in its net sales which clocked in at Rs.7247 million. This was on the back of improved demand of the company’s products – both in the local and export markets.

Local sales have the majority share in the overall sales mix of the company while its export market encompasses the Middle Eastern region with the KSA, Oman and the UAE topping the list. Sale from all the export destinations registered significant growth during the year.

The company has an annual capacity to process 17000 tons of eggs. In 2025, the company recorded capacity utilization of 88.20 percent versus 74.59 percent recorded in the previous year.

Enhanced capacity utilization as well operational efficiency achieved through various cost management measures enabled the company to record 39.75 percent improvement in its gross profit in 2025 with GP margin clocking in at 13.49 percent versus GP margin of 11.53 percent recorded in 2024.

Administrative expense mounted by 56.66 percent in 2025 mainly on account of higher payroll expense. This was the result of workforce expansion from 62 employees in 2024 to 114 employees in 2025.

Increased freight and forwarding charges due to elevated sales volume coupled with higher advertising & promotion budget resulted in 64.11 percent spike in distribution expense in 2025. Other expense surged by 45.25 percent in 2025 due to higher provisioning done for WWF, WPPF and ECL.

Other income improved by 103.22 percent in 2025 due to tremendous income on short-term investment and mark-up on liability waived by the associated company - Frisian Egg International B.V. During the year, the company raised funds through IPO which significantly strengthened its liquidity position.

These funds were utilized to meet working capital requirements and also in other strategic avenues such as the acquisition of mutual funds to boost its other income. Exchange gain posted a phenomenal growth of 863.61 percent in 2025. This was mainly the result of realized foreign exchange gain due to conversion of loan into equity.

BFBIO recorded 50.53 percent enhancement in its operating profit in 2025 with OP margin clocking in at 11.28 percent versus OP margin of 8.95 percent recorded in 2024.

Finance cost dipped by 35.62 percent in 2025 due to a downtick in discount rate coupled with the widespread settlement of outstanding liabilities (through repayment and conversion into equity).

Lesser outstanding debt coupled with improved cash position and increased equity due to issuance of shares through IPO and right offer resulted in a gearing ratio of 7.34 percent in 2025 versus 37.85 percent recorded in the previous year.

No current tax expense was incurred in 2025 which was in accordance with the Clause (126E) of Part I of The second schedule of Income Tax Ordinance, 2001 on account of the company’s operations in the Special Economic Zone.

This coupled with the effect of deferred tax resulted in the tax credit of Rs.3.02 million in 2025 versus tax expense of Rs.40.79 million recorded in 2024.

BFBIO posted net profit of Rs.741.687 million in 2025, up 95.30 percent year-on-year. This translated into EPS of Rs.3.68 in 2025 versus EPS of Rs.4.22 recorded in the previous year. NP margin picked up from 6.26 percent in 2024 to 10.23 percent in 2025.

Recent Performance (1QFY26)

During the first quarter of the ongoing fiscal year, BFBIO recorded 9.62 percent year-on-year growth in its net sales which clocked in at Rs.1878.24 million.

Demand remained stable during the period; however, abrupt increase in the price of shell eggs (the company’s core raw material) resulted in only 1.18 percent growth in gross profit in 1QFY26 with GP margin clocking in at 12.50 percent versus GP margin of 13.54 percent recorded in 1QFY25.

While the price of eggs usually decline in the summer season, it soared during the period under review due to higher demand in the international market on account of elevated egg price in the US and Europe.

Administrative expense mounted by 79 percent in 1QFY26 apparently due to continuous enhancement in the company’s operations which required additional human resources.

Minimum wage rate also increased during the period. Marketing expense also ticked up by 6.41 percent in 1QFY26 due to demand growth. Other expense dipped by 24.91 percent in 1QFY26 probably due to lower provisioning done for ECL. Other expense was completely offset by 1084.93 percent growth recorded in other income in 1QFY26.

Higher other income was the consequence of the company’s strategic investment decisions. Exchange gain nosedived by 24.56 percent in 1QFY26.

BFBIO recorded 7.57 percent growth in its operating profit in 1QFY26 with OP margin clocking in at 9.12 percent versus OP margin of 9.29 percent recorded in 1QFY25. Finance cost plunged by 62.91 percent in 1QFY26 due to monetary easing and lesser outstanding debt.

Net profit clocked in at Rs.161.174 million in 1QFY26, up 24.42 percent year-on-year. This translated into EPS of Rs.0.52 in 1QFY26 versus EPS of Rs.1.44 recorded in 1QFY25. NP margin grew from 7.56 percent in 1QFY25 to 8.58 percent in 1QFY26.

Future Outlook

The company plans to strengthen its supply chain by pursuing backward integration. This will not only ensure timely supplies and reduce the company’s reliance on external suppliers but will also stabilize its raw material cost which will enhance the company’s competitiveness in both local and export markets.

In line with the company’s aim to attain backward integration, it has made investment in the newly incorporated company, Agro layer Protein Farm Private Limited (APFL), thereby acquiring 26 percent shareholding in the company making it an associated company of BFBIO. This was done for the establishment of second poultry farm of the company.

To enhance its geographical footprint and to boost its export sales, BFBIO has also announced the successful establishment of its wholly owned subsidiary – Barkat Frisian Agro Global LLC-FZ – in the Meydan free zone of the UAE.

The aforementioned measures undertaken by the company to control its cost and enhance its sales will bear fruit in the coming times and will buttress the margins and profitability of the company.