Karachi: The Organic Meat Co Ltd (TOMCL) experienced a significant 31% year-on-year decrease in net earnings for fiscal year 2024, largely due to the absence of exchange gains that bolstered the previous year’s results. This financial performance was highlighted in the company’s corporate analyst briefing today, where management also discussed future growth plans and strategic shifts towards higher-value products.
According to JS Global, TOMCL’s fiscal results revealed that despite the earnings dip, the company achieved a remarkable 85% increase in revenue and maintained stable gross margins at 13%. Notably, the company saw a substantial growth in its beef and offal sales volumes, up 68% and 72% respectively. This year marked a shift in product focus, with chilled meat contributions dropping to 38% from 75% in FY23, while frozen meat’s share increased significantly to 45% from 13%.
During FY24, TOMCL expanded its slaughtering capacity by approximately 60% to 240 heads and completed the second phase of its frozen cooked beef production, adding 300 tons per month to its capacity. Following these expansions, the company secured significant repeat and new orders, including a 1,000 ton order from the UAE and a $12 million supply contract for cooked beef in FY25.
Management’s forward-looking statements included ambitious revenue targets, projecting over $50 million for FY25 after surpassing $40 million this year. They also outlined strategic investments aimed at diversifying and expanding the company’s product lines and market reach, including initiatives in pet chews, fast food production, and casing markets, with plans to expand into China, the EU, Canada, and CIS regions.
Additionally, TOMCL is focusing on strengthening its financial position by targeting a completely deleveraged balance sheet by 2026, with most capital expenditures expected to be funded through internal cash flows. However, changes in the tax regime for exporters and a new advance turnover tax could impact profitability and working capital from FY25 onward.