Mehmooda Maqbool Mills Limited (‘Mehmooda Maqbool’ or ‘the Company’) was incorporated on August 30, 1968. as a public unlisted company under the Companies Act, 1913 (now the Companies Act, 2017). It was listed on the Karachi Stock Exchange in 1968 and subsequently delisted later on.

The company’s two edible oil extraction units started operations in 2002 that have been engaged in crushing variety of edible oilseeds. The Company procures Cotton seed, Rapeseed, and Sunflower seed from local suppliers. For edible oil extraction, the Company majorly imports non-GMO Canola from Australia and non-GMO Soybean from Africa. The operations of both units depend upon the availability of the oilseeds and demand for edible oil. The Company has also installed a Ghee and Cooking oil and flour unit as well.

Solvent extraction units have a combined installed capacity of 400MT/day. Oil refining unit has an installed capacity of 72MT/day. Whereas, the flour mill has total installed capacity of 240MT/day. The Ghee & Cooking Oil Unit has a total combined production capacity of 100MT/day. The Company’s manufacturing facility and Head Office are located at 2-Industrial Estate, Multan.

Mehmooda Maqbool Mills Limited, a fully owned enterprise of the Maqbool Group, is primarily owned by the sponsoring family, who holds a significant ownership stake.

The ownership structure of the Company is notably stable, as it is entirely held by the sponsoring family. This consolidated ownership framework minimizes the potential for conflicts and ensures unified decision-making. With all shares vested within the family, the Company benefits from a cohesive vision and a strong commitment to its long-term growth and sustainability.

The Maqbool Group, founded by a respected business family of Multan, has established a significant presence in the region. Beyond its ownership of Mehmooda Maqbool Mills, the group also maintains notable interests in the textile sector, demonstrating a diversified portfolio within key industries of the local economy. This diversification underscores the family's commitment to the region's economic development. Mr. Bakhtawar, a seasoned businessman and member of the Maqbool family, has recently been elected as the Chairman of the Multan Chamber of Commerce. This appointment highlights his recognized leadership within the business community and further strengthens the family's ties to the local economy. His role as Chairman of the Chamber of Commerce positions him to advocate for business interests, promote economic growth in the region, and potentially create synergistic opportunities for the Maqbool Group's various ventures. It also suggests a deep understanding of the local business landscape and a commitment to its advancement.

Mehmooda Maqbool Mills Ltd. benefits from the financial strength of its parent company, Mehmood Textile Mills, a prominent player in the textile industry. This affiliation with Mehmood Textile Mills, allows the Company to leverage the resources and expertise of a larger and established group. This relationship likely contributes to the company's financial stability and ability to pursue growth opportunities.

Board comprises of seven members at present, two executive and five non-executive directors. All the members are from the sponsoring family.

All the BoDs are experienced individuals. The Board’s Chairman, Mian Tanvir Ahmad Sheikh, is associated with Mehmooda Maqbool Mills Ltd. and Maqbool Group since inception and has more than four decades of business experience.

The Directors are actively involved in the management of the Company to oversee and manage the Company's operations, ensuring direct involvement in strategic and operational decision-making. However, the Board does not currently have any sub-committees in place to provide specialized support or assistance in governance or management functions.

The Company’s external auditors, Shinewing Hameed Chaudhri and Co. Chartered Accountants, have expressed unqualified opinion about the financial statements of FY24. Company’s auditors have been QCR rated by ICAP and are also in category ‘B’ of SBP’s panel

Mehmooda Maqbool Mills Ltd. operates through three functional departments: Sales & Marketing, Procurement & Production, and Finance & Administration. Each department is headed by a dedicated director, ensuring focused management and clear accountability within these key areas of the business.

The Company’s CEO Mian Bakhtawar Tanvir Sheikh, has an overall working experience of more than 13 years. He has been associated with the Company since inception. Mr. Bakhtawar, a seasoned businessman and member of the Maqbool family, has recently been elected as the Chairman of the Multan Chamber of Commerce. This appointment highlights his recognized leadership within the business community and further strengthens the family's ties to the local economy. His role as Chairman of the Chamber of Commerce positions him to advocate for business interests, promote economic growth in the region, and potentially create synergistic opportunities for the Maqbool Group's various ventures. It also suggests a deep understanding of the local business landscape and a commitment to its advancement.

The effectiveness and efficiency of Mehmooda Maqbool Mills' management team are enhanced through the timely and relevant information provided by its management information system (MIS). A well-functioning MIS plays a crucial role in supporting informed decision-making at all levels of the organization. The management structure currently lacks effectiveness due to the absence of formal management committees. This gap presents an opportunity for improvement, as the establishment of such committees could provide specialized oversight, streamline decision-making processes, and enhance overall governance. By implementing these committees, the Company could achieve more efficient management and better alignment with strategic goals.

Mehmooda Maqbool Mills Ltd. utilizes an Enterprise Resource Planning (ERP) system, a comprehensive software solution that integrates various business processes and data into a unified system. This ERP system likely manages core functions such as finance, manufacturing, sales, and human resources. While the ERP system serves as the central repository for business data, the company's internal dissemination of information takes a more tailored approach. Instead of relying solely on direct access to the ERP system for all employees, the company documents information and generates reports "as per requirement." This suggests a controlled and selective distribution of information.

Mehmooda Maqbool Mills Ltd. conducts regular internal reviews to assess and oversee the effectiveness of its operational controls. These reviews are a critical component of internal governance and risk management, designed to ensure that the company's processes and procedures are functioning as intended.

Edible oil is one of the highest imported commodities in Pakistan. During the year, 2.717 million tonnes of edible oil (including oil extracted from imported oilseed) of value Rs 794 billion was imported. Local edible oil production remains at 0.471 million tonnes. In line with population growth, edible oil demand is forecast to grow about 5% and palm oil imports grew accordingly, reaching 3.6mln tons in FY24. The price of Soybean oilseed stood at 479 USD/MT in Jun-24 as compared to 591 USD/MT in the comparative year, showcasing a decrease of ~18%. On the other hand, the price of palm oil stood at 873 USD/MT in Jun-24 and 816 USD/MT in Jun-23, which is forecasted to ease further. Comparatively reductions in selling prices have impacted the revenues substantially for the refineries. Due to the rise in input costs, especially raw material cost, many companies have experienced a reduction in their profit margins and faced working capital shortages. With expectations for better cottonseed production, Total oilseed production in 2024/25 is projected to decrease marginally to 3.43 million tons, due to an expected minor decline in cottonseed production, and no growth in rapeseed and sunflower seed output. The industry's future outlook is developing due to price volatility and PKR depreciation.

Considering the revenue generated within the edible oil industry in Pakistan, the Company holds a substantial market share. Similarly, the Company has also achieved a significant market share in the flour market.

The Company, focused on local sales, generated revenue from three core product categories: ghee & cooking oil (38%), flour (27%), and meal (35%).In FY24, the Company achieved a top-line revenue of PKR 13 billion, compared to PKR 10 billion in FY23. This represents a substantial 26% year-on-year growth in sales. The primary driver of this growth was the significant increase in flour sales, which rose from PKR 179 million in FY23 to PKR 3.6 billion in FY24. This highlights the Company's successful expansion in the flour segment.

The Company's gross profit margin saw improvement in FY24, rising to 10.6% from 9.2% in FY23. This positive change can be attributed to the increased sales volume, primarily driven by the strong performance of the flour segment. The higher sales volume likely allowed the company to absorb fixed costs more effectively, contributing to the improved gross margin. Operating profit margin also demonstrated growth, reaching 8.8% in FY24 compared to 7.3% in the previous fiscal year. This indicates improved operational efficiency and cost management, likely influenced by the increased sales and potentially better control over operating expenses. However, despite improvements in gross and operating margins, the Company experienced a decline in net profit margin. It decreased significantly to 0.8% in FY24 from 7.0% in FY23. This deterioration is primarily attributed to elevated finance costs, which offset the gains achieved in gross and operating profitability.

Over the period, the company has diversified its manufacturing, producing meal as a by-product of edible oil extraction and flour, which has a stable national demand.

The Company's inventory management showed slight improvement in FY24, with average inventory days decreasing to 32 days from 36 days in FY23. This suggests potentially more efficient inventory turnover and a reduced risk of obsolescence. However, there was a slight deterioration in the management of trade receivables, with average collection days increasing marginally to 68 days in FY24 from 67 days in FY23. This indicates that the Company took slightly longer to collect payments from its customers. While the change is small, it bears monitoring to ensure it doesn't represent a trend. Overall gross working capital days improved slightly, decreasing to 100 days in FY24 from 102 days in FY23. This positive change reflects the combined impact of improved inventory management offsetting the slight increase in receivable days. The Company experienced a deterioration in managing its trade payables, with payable days decreasing to 10 days in FY24 from 7 days in FY23. This suggests the Company paid its suppliers more quickly. While paying suppliers promptly can be beneficial for maintaining good relationships, excessively short payable days could impact cash flow. Net working capital days, which represents the overall time it takes to convert current assets into cash, improved to 90 days in FY24 from 95 days in FY23. This is a positive indicator, suggesting enhanced efficiency in the Company's cash conversion cycle, driven primarily by improvements in inventory management.

The Debt Coverage Ratio analysis provides valuable insight into the company’s capacity to meet its debt obligations through its Free Cash Flow to Operations (FCFO), reflecting its financial stability and creditworthiness. In FY24, the Company's FCFO increased to PKR 887 million, compared to PKR 634 million in FY23. This is a positive development, indicating improved cash generation from core operations. However, despite the increased FCFO, the Company's finance costs also rose significantly to PKR 606 million in FY24 from PKR 369 million in FY23. Consequently, the Company's debt coverage ratios decreased. The FCFO coverage ratio declined to 1.5x in FY24 from 1.7x in FY23. This indicates a slightly reduced capacity to cover finance costs with operating cash flow. Similarly, the total debt coverage ratio also decreased to 1.4x in FY24 from 1.6x in FY23, reflecting a similar trend in the overall ability to service all debt obligations. While the coverage ratios remain above 1.0x, the downward trend warrants attention and suggests that the Company's increased debt load is impacting its debt servicing capacity.

The Capitalization Ratio analysis evaluates the proportion of a company’s capital structure financed through debt, offering insights into its long-term financial leverage and risk profile. The Company's capital structure appears to be highly leveraged. This signifies a reliance on debt financing, which can amplify both profits and losses. In FY24, the Company's total borrowings amounted to PKR 2.6 billion, a decrease from PKR 3.3 billion in FY23. While the reduction in overall debt is a positive sign, the composition of the debt raises concerns. A significant 94% of the Company's borrowings are short-term. This heavy reliance on short-term debt can create refinancing risk, as the Company will need to regularly roll over these obligations. This exposes the company to fluctuations in interest rates and the availability of credit, potentially impacting its financial stability. While the total debt has decreased, the high proportion of short-term debt suggests the company's financial risk remains elevated.