Pakistan’s food companies post 23% profitability growth in CY22

Pakistan’s food companies post 23% profitability growth in CY22

KARACHI: Pakistan’s listed food companies’ annual revenues have expanded by 34% YoY, which analysts believe is a result of higher unit prices. To recall, CPI inflation during CY22 averaged at 20%, while higher inflation, import restrictions and sharp currency devaluation were witnessed in the later part of the year.

According to JS Global Capital, despite inflationary pressures and higher commodity prices, Pakistan’s food sector was able to pass on the cost impact to end consumers to a great extent as gross margins only trimmed by 1ppt YoY to 25%.

The sector was also able to broadly preserve its operating margins in CY22, remaining steady at 13% over controlled marketing and administrative expenditures. As a result, profitability expanded by 23% YoY.

Double-digit growth in profits have proved food sector’s resilience to the ongoing macro challenges. Albeit, the same has not been priced in to respective stock performances as during the last 12 months, listed companies underperformed the benchmark index.

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