At first glance, it is almost like the financials made an accounting mistake. Matco Foods, one of the few commodity-oriented food companies listed on the PSX made a loss in the year 2021. This is strange for two reasons: first, this is the company’s first loss since 2013, the last year for which there is publicly available data. And second, this loss happened despite this being the second-highest revenue that the company has earned in the last nine years.
And what’s even odder, is that the year 2020 was, ironically enough, great for the company. According to that year’s company’s annual report, Pakistan’s basmati rice exports grew by 35%, mostly because there’s been a surge in food products because of the pandemic (people are eating, cooking and stocking up more). India, which is the biggest exporter of basmati rice, was badly affected by the pandemic, which meant that Pakistan actually took over some of the basmati demand. At that time, the company had the highest sales in 2020, at Rs11,289 million.
Fast forward to 2021, and sales dipped just a little bit to Rs10,566 million. But net income fell from a profit of Rs150 million, to a loss of Rs60 million. To understand what is happening with Matco, it helps to have a little context.