Karachi: Macpac Films Ltd (MACFL) recently held a corporate briefing to discuss its first quarter financial results for fiscal year 2025 and future outlook. MACFL reported an earnings per share (EPS) of Rs0.13 for 1QFY25, a significant drop from the EPS of Rs1.97 in the same period last year.
According to JS Global, the briefing revealed that MACFL experienced a 1% year-over-year increase in revenue, demonstrating resilience in a challenging economic environment. However, the company's gross margins fell by 11.8 percentage points due to rising gas prices and inflationary pressures. Management remains optimistic, suggesting that reduced interest rates could lower financing costs, while improved economic activities are expected to boost local volumes and margins.
MACFL's management emphasized the difficulty in passing on price increases to customers, highlighting the necessity of reducing waste and enhancing efficiencies to support margins. Additionally, the company is considering alternative energy solutions, such as solar power, to decrease electricity costs. A 1MW solar project is currently being installed, with half of the work completed.
The briefing also highlighted MACFL's exploration of export markets, anticipating increased export sales in upcoming quarters. The company's new subsidiary in Dubai will operate under UAE's free zone regulations, targeting the Middle East export market, with key destinations including the USA, Europe, and the Middle East.
MACFL aims to capitalize on untapped market potential rather than compete directly with existing companies, identifying significant growth opportunities. Pakistan's plastic consumption stands at 7.5 kg per capita, considerably lower than developing countries' 36 kg and the U.S.'s over 100 kg per capita.
Management noted that the barriers to entry in the industry are medium to low, with capital expenditure for a new plant estimated at roughly Rs20 billion. They anticipate improved volumes sequentially as plant operations, previously impacted by the BMR conducted last quarter, stabilize.