The Organic Meat Company navigates export shift as margins weaken

Traders Union
All News
Financial News
Organic Meat export shift

Highlights

TOMCL's net sales surged 85.35 percent year on year to Rs. 11,797.76 million in 2024, with export volumes rising 62 percent, before projected sales decline of 12.11 percent to Rs. 12,310.21 million in 2026.
Gross margin fell from 18.38 percent in 2020 to 13.10 percent in 2022 as cost of sales climbed to Rs. 646 per kg, contributing to a 52.19 percent year-on-year drop in operating profit despite net profit support from exchange gains.
In 2025–2026, TOMCL is shifting from direct export-led sales to a mix including local institutional niche sales and indirect exports, reflecting margin pressure from freight, inflation, and changing trade channels.

Operating performance and strategic changes

As reported by Business Recorder, The Organic Meat Company Limited, listed on the Pakistan Stock Exchange as TOMCL, is reviewing a period in which revenue generally rises sharply before easing in 2026, while earnings momentum slows after 2023.

The company, incorporated in 2010, processes and sells halal meat and related products and remains a leading exporter of red meat and meat by-products. Middle Eastern countries are its main export market, while the addition of pet food raw material helps it reach the U.S. and Europe. The company also has business exposure in the Far East, CIS and South Asia.

Revenue growth is uneven across product categories and years. In 2021, lower fresh chilled meat exports to the CIS market offset strong growth in frozen meat and frozen offal volumes, but favorable pricing, currency dynamics and offal sales still lift net sales 16 percent year on year to Rs. 3,927.82 million. In 2022, export sales rise only 2 percent, yet pricing power and Pak Rupee depreciation push net sales up 18.58 percent to Rs. 4,657.77 million.

Sales acceleration strengthens in the following years, with net sales reaching Rs. 6,365.24 million in 2023 and then surging 85.35 percent year on year to Rs. 11,797.76 million in 2024, supported by a 62 percent increase in export volumes. Net sales then grow to Rs. 14,006.07 million in 2025 before falling 12.11 percent to Rs. 12,310.21 million in 2026. During 2025, TOMCL changes its model from being mostly export-led to adding local institutional sales in niche categories, and in 2026 it shifts further from direct exporting to indirect exporting through local customers.

Cost pressure, ownership and market implications

Margin performance shows growing strain despite the topline expansion. Gross margin falls to 16.54 percent in 2021 from 18.38 percent in 2020 as procurement and depreciation costs increase, while higher clearing and forwarding charges raise distribution expenses. In 2022, cost of sales climbs further to Rs. 646 per kg, shrinking gross margin to 13.10 percent and pushing operating profit down 52.19 percent year on year, even as other income from exchange gains and biological assets supports net profit growth.

Net profit rises to Rs. 303.48 million in 2021 and then to Rs. 411.42 million in 2022, when EPS reaches Rs. 3.05 and net margin stands at 8.83 percent. The broader trend described for the period shows margins strengthening in 2023 before declining through 2026, with the exception of a firmer operating margin in 2024. That suggests the company’s revenue expansion increasingly depends on pricing, currency support and changing market mix rather than consistently improving operating efficiency.

As of June 30, 2026, TOMCL has 196.340 million shares outstanding held by 14,516 shareholders. Directors, the CEO, their spouse and minor children hold the largest stake at 47.05 percent, followed by the local general public with 39.18 percent. Local companies hold 7.45 percent, banks, DFIs and NBFIs hold 2.80 percent, insurance companies hold 1.81 percent, and modarabas and mutual funds hold 1.68 percent, while foreign general public investors account for 0.03 percent.

For Pakistan’s meat export sector, TOMCL’s results highlight both the scale of demand in overseas markets and the pressure created by freight costs, inflation, currency movements and shifting trade channels. The move toward local sales and indirect exports may broaden flexibility, but it also signals that sustaining export-led margin growth remains a challenge.

Our earlier article on Pakistan’s retail fuel price adjustment explained how the federal government revised ex-depot petrol and high-speed diesel rates under the official pricing mechanism, with changes tied to global benchmarks, import premiums, and Platts-rate movements. It noted that uneven price pressure between petrol and diesel can feed through to transport costs, consumer spending, and inflation expectations—factors that ultimately influence operating costs across the economy.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.