ENGRO FOODS LIMITED (EFOODS): 3QCY18 EPS IS ESTIMATED AT PKR 0.24, DOWN 10% YOY
Tuesday, 16 October 2018
BY: ALFA ADHI SECURITIES (PVT.) LTD.
EFOODS is scheduled to announce 3QCY18 financial results on 17th Oct-18. We expect company’s earnings to drop 10% YoY to PKR 0.24/share, taking 9MCY18 earnings to PKR 0.90/share, up 79% YoY.
We expect the relaunch of Tarang to provide an impetus towards higher sales volume during 3QCY18 where EFOODS’ net sales are estimated to clock in at PKR 9.5bn, up 5% YoY. However; 9MCY18 net sales are likely to settle at PKR 24.9bn, down 9% YoY.
We estimate company’s gross margins to expand 4pps YoY to 20.5% amid 1% YoY decline in SMP prices during 3QCY18. Similarly, 9MCY18 gross margins to settle at 20.5%, up 3pps YoY.
We estimate EFOODS to incur a distribution, marketing and administrative expenditure of PKR 1.57bn, up 38% YoY during 3QCY18, which is mainly driven by higher marketing expense during the quarter. Likewise, the same for 9MCY18 to settle at PKR 4.2bn, up 10% YoY.