Author Topic: EFOODS -- Engro Foods Limited  (Read 554373 times)

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Offline Farzooq

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EFOODS -- Engro Foods Limited
« Reply #-1 on: June 25, 2011, 11:59:13 AM »
All about engro foods
« Last Edit: April 13, 2012, 11:07:56 AM by M&M »
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EFOODS -- Engro Foods Limited
« Reply #-1 on: June 25, 2011, 11:59:13 AM »

Offline Farzooq

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Offline Abbas

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Re: EFOODS -- Engro Foods Limited
« Reply #1 on: June 25, 2011, 07:26:47 PM »
Is it worth buying at RS 25.01?

Offline 007

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Re: EFOODS -- Engro Foods Limited
« Reply #2 on: June 26, 2011, 02:58:18 AM »
provisional trading ho gee iss main

Offline MAR

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Re: EFOODS -- Engro Foods Limited
« Reply #3 on: June 26, 2011, 07:45:06 PM »
Is it worth buying at RS 25.01?

Could some one provide a comparison of EFL v/s EPCL .... prospectus is comparing EFL with Nestle which in no way is a valid comparison.

As a consumer of I personally would never go for any of Engro product against an available Nestle product ... I did a test with Olfer v/s MilkPack.

Offline jawaddar

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Re: EFOODS -- Engro Foods Limited
« Reply #4 on: June 26, 2011, 08:01:41 PM »
Is it worth buying at RS 25.01?

Could some one provide a comparison of EFL v/s EPCL .... prospectus is comparing EFL with Nestle which in no way is a valid comparison.

As a consumer of I personally would never go for any of Engro product against an available Nestle product ... I did a test with Olfer v/s MilkPack.

But engro is leader in UHT milk as per prospectus

Offline momo

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Re: EFOODS -- Engro Foods Limited
« Reply #5 on: June 26, 2011, 10:05:06 PM »
Is it worth buying at RS 25.01?

Could some one provide a comparison of EFL v/s EPCL .... prospectus is comparing EFL with Nestle which in no way is a valid comparison.

As a consumer of I personally would never go for any of Engro product against an available Nestle product ... I did a test with Olfer v/s MilkPack.

They have 40% share of the UHT milk industry. Tarang is also their brand. They have ventured into many other products as well.

And why would you compare a food company with a polymers and chemicals company? Nestle and UniLever Foods are the best comparison for Engro Foods.

Thanks.

Offline jaz

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Re: EFOODS -- Engro Foods Limited
« Reply #6 on: June 26, 2011, 10:16:02 PM »
comparison? its madness. look at the debt of efl, look at its earning, no of shares, cash balance. Its ridiculous. dont think that engro will share the earnings with share holders. it will mostly go to debt servicing. an eps of less than 1 and offer price of 25. it will be hugely under subscribed. after a couple of months you will find it under 15 rs any way......

Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #7 on: June 26, 2011, 10:26:46 PM »
Engro Foods Limited was formed as a wholly owned subsidiary of ECorp in 2005. The Company
started operations in 2006 and has become a major player in the Food Industry of Pakistan in a
span of 5 years. It has attained market leadership in Ultra High Temperature (?UHT?) Industry
at the end of 2010 and has launched multiple new products including Ice Cream, Flavored Milk,
Fruit Juices and Milk Powders, that show great potential for future.

To support these brands and their highest standards of quality, E Foods has invested heavily in
milk processing and milk collection infrastructure. In addition, the Company has innovated by
venturing out of the dairy sector and stepping in the Beverage Industry by launching Olfrute
and ice cream industry by launching Omoré .

The Company is also entering into international markets. Its first venture is to manage a Halal
food business in North America known as ?Al-Safa? , which was recently acquired by E Corp at
a total cost of US Dollars 6.3 million. The entire shares of Al-Safa are proposed to be purchased
by the Company from ECorp at cost (being the actual rupee amount invested in Al-Safa) subject
to requisite approvals from the Regulator. Details of the ?Al-Safa? acquisition are mentioned
in Section 4.52 of the OFSD.

E Foods strategy from the very beginning was to make heavy investments in the infrastructure
development and brand building in the initial years. At present, the Company has reached a point
where it has built the critical mass in terms of its infrastructure and significant top of mind with
consumers. With established leadership in the Ambient UHT market, well diversified product
portfolio and strong top of mind brand awareness, the Company is poised to normalize its
marketing investments in line with the industry standards and benefit from the momentum built
in the recent years.

The impact of the heavy investments in initial years resulted in the losses carried in the book.
However, going forward the Company plans to deliver significant improvement in the bottom
line trends as it benefits from the investments in the initial years.
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Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #8 on: June 26, 2011, 10:31:38 PM »
Income Statement (PKR Million) 2006 2007 2008 2009 2010
Net Sales                         1,506 3,631 8,173 14,665 21,050
EBITDA                               (509) (706) (323) 246 1,656
Net Profit/ (Loss) for the year (428) (620) (554) (435) 177
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Online Daftari

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Re: EFOODS -- Engro Foods Limited
« Reply #9 on: June 26, 2011, 10:37:51 PM »
Farzooq bhai is it worth subscribing,
People have been telling me of serious capital gains in the next 3 years, plus a dividend payment ability, two years down the lane, what is your call, and what could be the likely gains, both div yield and capital gains?
 :thanks:
RABB, sun le tu sariyan hun aaftaan utha le,
Lagda ni dil meinu wapas bulale..

Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #10 on: June 26, 2011, 10:43:43 PM »
Farzooq bhai is it worth subscribing,
People have been telling me of serious capital gains in the next 3 years, plus a dividend payment ability, two years down the lane, what is your call, and what could be the likely gains, both div yield and capital gains?
 :thanks:

it sure is attractive but for mid to long term
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Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #11 on: June 26, 2011, 10:48:04 PM »
Engro Foods Ltd: Offer for Sale

Having commenced operations in 2005 and achieving breakeven in 2010, Engro Foods Ltd (EFoods) will now be listed on the local bourses through an Offer for Sale. In this regard, following a successful private placement of 48mn shares, ENGRO will offer 27mn shares (3.61% of total shares) to the general public. While the company is still relatively young, it has managed to expand its product suite across UHT milk, powdered milk, cream, ice cream, juices, rice processing and halal meat. As a result, net sales have expanded from PkR1.51bn in CY06 to PkR21.1bn in CY10, a growth CAGR of 93%.  Profitability is now beginning to show traction with revenue growth - 1QCY11 profits of PkR117mn alone accounted for 2/3 of full-year CY10 profits. Going forward, EFoods management projects NPAT of PkR727mn (EPS: PkR0.97) in CY11 and NPAT of PkR1,679mn (EPS: PkR2.24) in CY12. On CY12 projected earnings, the offer price of PkR25/share implies a forward PER of 11.1x.

akd
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Offline Dhillon

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Re: EFOODS -- Engro Foods Limited
« Reply #12 on: June 27, 2011, 06:14:08 AM »
kindly someone write the brand name. Thanks

Name of products                   Brand Names

1)UHT milk
2)powdered milk
3)cream
4)ice cream
5)juices
6)rice
7)Halal Meet

It is explicit that sale of E-Foods is escalating from 1.5 billion to 21.1 billion during the 2006 to 2010. Potential of 2011 is built-in in my opinion in the offer price Rs.25. it is good stock. Hawk eye of the investors will be on the stock. Like every share this will also provide the attractive opportunity to buy at the less price.
« Last Edit: June 27, 2011, 06:20:35 AM by Dhillon »

Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #13 on: June 27, 2011, 09:56:41 AM »
Portfolio expansion at a glance

2006 Olpers Olpers Cream
2007 Tarang Tarrka Glorious
2008
2009 Omore Owsum
2010 Olfrute Tarang Powder
2011 Olper?s Lite
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Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #14 on: June 27, 2011, 11:48:48 AM »
Foods going public – we see value
Engro also announced an offer for sale of 27mn shares of Engro Foods on 5?7th July at
PRs25/sh. EFoods is a compelling growth story, in our view, which plays up to Pak rural
strength and targets underpenetrated niches. After 93% revenue CAGR since 2006, we now
eye 22% 5?year revenue and 77% earnings CAGR for Foods over 2010?15E. We value Engro
Foods at PRs37/sh (of Foods).

kasb
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Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #15 on: June 27, 2011, 12:15:37 PM »
Engro Foods; Offer for Sale
Engro Corporation (ENGRO) has expressed “Offer for Sale” (OFS) of 27mn
ordinary shares of Engro Foods Limited (EFoods) to general public at PKR
25/share. ENGRO has already offered 48mn shares through a Private Placement
to a group of foreign and local investors. The subscription is likely to take place
from 5th Juy-7th July 2011 during banking hours. The Offer Price includes a
premium of PKR 15/share, this transaction will generate a gain on sale of PKR
1,125mn, translating into after tax per share impact of PKR 2.24/share for
ENGRO. On CY12 earnings projection of the company the Efoods offers an
implied PER of 11.1x.
The proceeds of the transaction would be utilized in undertaking capital
expenditure for the following requirements:
? Increasing market share in the Dairy, Milk, Farming and Ice-cream
segments.
? Investment in its subsidiary, Engro Foods Supply Chain (Pvt.) Limited.

Company’s Products Overview
UHT diary with 39% EFood share leading the unprecedented growth
? Dairy and Juices (DJ) Segment - DJ has launched nine brands in the
domestic market over the span of five years. These brands include Olper’s
Milk, Olwell, Tarang Liquid and Powdered Tea Creamer, flavored milk by
the brand name Owsum, a range of juices and nectars by the brand name
Olfrute and others. The company further intends to expand its product
range with the introduction of Growing up Milk Powder (GUMP), Infant
Nutrition, Cereals, Yogurt drinks, etc.
? The Ice Cream segment is under the brand name Omoré. The brand has so
far has captured 17% of the market share, while experiencing a strong
volumetric growth of 20%. The segment has become second largest
contributor after UHT Milk.

Company’s Capex plan going forward
In order to maintain the market share, the company would need to adopt an
aggressive growth strategy, considering the food industry is in growth stage. For
CY11, Engro Foods has budgeted a capex of PKR 5.2bn including investment in
the supply chain subsidiary. Out of this, PKR1.6bn capex has been incurred
while 3.6bn is still to be invested. Capex will be funded by a mix of internal cash
generation (PKR 2.1bn), private placement (PKR 1.2bn) and the remaining
through debt financing.

Recent financial performance of the company
Net revenues of the company have grown at a CAGR of 94% from CY2006-
CY2010. In CY2010 it posted a profit of PKR 176mn compared to loss of PKR
433mn registered in CY2009. Moreover, in 1QCY11 Engro Foods recorded a
Profit after tax (PAT) of PKR 117mn. This accounted for 66% of profitability of
CY2010. As per management estimates, CY2011 EPS is likely to be PKR 0.97
whereas for CY2012 they expect to be around PKR 2.24/share.

Key Consideration
? Engro Foods has a debt to equity ratio of 51% as at De 31st, 2010
? It is pertinent to mention that EFoods is likely to get a tax credit of 15%
announced in the federal budget of FY12.
? The company has offered Employee stock option scheme (ESOP). In a
span of four years from 2011-2014 the employees may exercise their call
option of total 21mn shares, which would lead to further dilution of shares.

AHL
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Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #16 on: June 27, 2011, 12:49:30 PM »
Food Producers: Engro Foods OFS - Food For Thought

   Engro Foods (EFOODS) Offer for sale (OFS) is scheduled to take place between July 05, 2011 and July 07, 2011; the company plans to offer 27mn shares at PKR25/share to the general public

   We currently have a Subscribe stance on the company’s stock with a Dec 11 – target price of PKR35/share

   Population growth coupled with increasing health consciousness, is expected to aid the company growth going forward; we expect EFOODS’ revenues to grow to PKR82bn by 2015E

   Debt situation for the company is expected to remain stable over the medium term horizon, as increasing capacity is likely to improve operating cash flows going forward

   Current capital expenditure plans include increasing Ambient UHT milk capacity as well as entering into new ventures such as rice and powder milk
 
Metrics 2011E 2012E 2013E 2014E 2015E
EPS (PKR) 0.6 1.5 2.7 5.0 7.3
BVPS (PKR) 10.5 13.9 16.6 21.6 28.9
PER (x) 44.5 16.2 9.3 5.0 3.4
PBV (x) 2.4 1.8 1.5 1.2 0.9
Source: BMA Research
« Last Edit: June 27, 2011, 01:05:17 PM by Farzooq »
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Offline Farzooq

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Re: EFOODS -- Engro Foods Limited
« Reply #17 on: June 30, 2011, 09:46:17 AM »
Engro Foods eyes acquisitions
 our correspondent
 Thursday, June 30, 2011

KARACHI: Engro Foods has set eyes on acquisitions to expand the business in Pakistan and abroad as it prepares to make initial public offering in the next few days, senior officials of the company said on Wednesday.

The Rs675 million which Engro Foods will raise from IPO of 27 million shares early next month will go mostly to support existing infrastructure of the dairy business, said Sarfaraz Rehman, the Chief Executive Officer.

“But in the next eight years, at least half of the revenue will come from international operations,” he said, talking to journalists about future plans. “Right now, we are heavily investing in our brands.”

The maker of Olper’s milk and Omore ice creams has recently acquired Al-Safa Halal, a small food company based in North America. Al-Safa markets cooked halal meat products, sourced from farms in Canada. The dairy business in Pakistan will not have any direct link with the Engro Foods’ global business unit (GBU), which has taken over Al-Safa. But it will be used to expand outreach to the Middle East and Europe in the next couple of years, said Ali Akbar, Vice President GBU. “There is a lot of opportunity for growth for Halal meat products. Muslim population is growing and the young generation wants easy-to-cook meals.”

Engro Foods officials said that a marketing plan including expenditure proposals for advertisement has been submitted to the board of directors for approval. “I can’t say how much we will be spending in North America under this head, but it is going to be just like any of the other brands we own,” said Akbar.

The company has already sold 48 million shares to National Bank of Pakistan (NBP) and AKD Securities. These shares cannot be traded before January 2012. This and the upcoming IPO will raise Rs1.2 billion for the company.

“This is all part of Rs7 billion capital expenditure plan,” said Rehman. “We have to build sheds for cows and spend on the dairy farm.”

After the IPO, 10 percent shares will be held by private investors while 90 percent stake in Engro Foods will remain with Engro Corporationóthe parent company.

“I know there is a lot of hype about the debt that Engro Corporation has raised. But let me assure you that that is not a problem and in any case Engro Foods is a separate entity,” said Rehman.
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Offline addi

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Re: EFOODS -- Engro Foods Limited
« Reply #18 on: June 30, 2011, 09:49:02 AM »
Farzooq, is it good to participate in IPO's? or but it from ready market....