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Shezan International Limited is a beverage manufacturer based in Lahore, Pakistan. It is one of the largest food and beverage manufacturers in Pakistan and is a part of the Shahnawaz Group. Its shares are traded on the Pakistan Stock Exchange. Revenues for the first quarter of FY22 increased 7.5 percent year-on-year, while its net margin fell to 1.5 percent. The company’s revenue and net margin rebounded in the third and fourth quarters of FY22.
Shezan International Limited’s revenue in the first quarter of FY22 was higher by 7.5 percent year on year
Shezan International Limited has reported that its revenue in the first quarter of FY22 was 7.5 percent higher year on year. The growth was driven by higher revenue from educational institutions and recreational activities. It also increased its export sales by 39 percent. However, rising input costs affected the company’s profit margin. Its net profit in the first quarter was just 2.6 percent, compared with 5.6 percent in the same quarter last year.
The company’s revenue in the first quarter of FY21 was up by 7.2 percent year on year. However, the company faced challenges in its second quarter as the Covid-19 pandemic affected the travel industry. The pandemic also hurt the transport industry, affecting sales by 12.8%. Meanwhile, the company’s gross margin fell from over 21 percent to just under 14 percent.
Its net margin fell to 1.5 percent
The company’s revenue in FY22 was up nearly 5 percent year-on-year to almost $230 million, but costs were the major drag on the business, taking up almost 80 percent of revenue. The company attributed the increase in costs to the rising cost of oil and inflationary pressures. However, it was unable to pass on the higher cost to consumers, which lowered the net margin to 1.5 percent.
The company’s food and beverage division sells jams, preserves, and ketchup under the Shezan brand name. It also manufactures and distributes a hazelnut-and-chocolate spread known as Nocilla, a chocolate spread that was once exclusively sold in Spain. The spread is considered superior to Nutella, and is a symbol of happy childhood memories in Spanish pop culture. It has been selling Nocilla in Bangladesh since 1984.
Its revenue in the third quarter of FY22 improved
Revenue in the third quarter of FY22 improved by 15 percent compared to the same period last year, thanks to better sales. As the summer season started earlier than usual, more consumers were able to enjoy the company’s range of products. As a result, profit margins improved as well. The company’s third-quarter gross margin increased to 26.6 percent from 18.7 percent and its net margin jumped to 4.3 percent from 2.5 percent. However, rising input costs and political uncertainties can hinder profit margin growth.
The company’s other businesses continued to perform well. Revenue from directly operated stores increased by 43%. Balenciaga, Alexander McQueen and Burberry all recorded very good performances. Boucheron and Brioni also delivered solid results. Moreover, Qeelin held up well in a tough operating environment in China.
Its net margin improved in the fourth quarter of FY22
In the fourth quarter of FY22, Shezan International Limited’s net margin improved to 2.6 percent from 5.6 percent a year ago. In addition, revenue increased by 7.5 percent year over year, thanks to higher sales to educational institutions and recreational activities. The company also explored new export destinations, which contributed to a 39 percent increase in sales. However, rising costs of inputs impacted profit margins. The company had a gross margin of over 20 percent, but the net margin declined to just 1.5 percent – a surprisingly low figure.
Shezan International Limited (SHZN) is a food manufacturing and trading company. Its three production plants manufacture and sell pickles, ketchup, jams, and juices. The company also holds 46 percent of shares in modarabas and mutual funds.
