By: Ismail Iqbal Securities (Pvt.) Limited
Al-Shaheer Corporation (ASC) registered earnings of PKR 4,984mn (EPS: PKR 3.25), reflecting an increase of 12.3% YoY. The earnings were primarily driven by strong exports demand in the Middle East, and higher penetration in the local market, propelled by Meat one and Khaas. Other than that, Qurbani service during Eid ul Adha and bulk orders from some major local companies contributed towards the top line of the company. In the Analyst briefing held yesterday, the management highlighted their overall progress on their expansion plans, financial progress during the year, and their plans to use surplus money from IPO. They also divulged their future plans to reduce reliance on exports and to further concentrate on penetrating the local market.
Huge exports demand from Middle East The management delineated the strong earnings growth in six years of CAGR 58.2%. They also believe that the demand would continue to go up by 25% YoY. In FY15, the earnings break up stood at exports (76%), Meat one (21%) and Khaas (3%). Further, the export market is highly concentrated as 20% of their customers control 80% of their exports, with Lulu supermarket being the major importer. Their major importing countries are Bahrain, Oman, Kuwait and Saudi Arabia. They also revealed that their gross margin from meat one, Khaas and exports are 23%, 18% and 15% respectively.
According to the management, potential for local demand is high too as Pakistan’s per capita meat consumption is just 18kg, whereas the average world per capita meat consumption is 42kg.