Khadija Edible Oil Refinery (Pvt.) Limited ('Khadija edible oil' or ‘the Company’) was incorporated in Dec-2005 as a Private Limited Company under the repealed Companies Ordinance 1984 (Now Companies act 2017).

The Waheed Group has a mission of providing the best possible quality of vegetable ghee and edible oil products with the highest standards of production and professionalism, the Group is presently capable of producing well over 850 million tons of vegetable ghee and edible oil every day, which is the largest capacity in Pakistan. Mr. Sheikh Abdul Waheed, founder of Waheed Group of Industries (‘the Group’) started his business journey in the tea industry in the 1970s. Later, in 1988 he entered the edible oil industry. In 1993, the Group started its first venture Waheed Hafeez Ghee Industries (Pvt.) Limited in Hattar, KPK which currently has the capacity to produce 126,000 MT per annum of vegetable oil/ghee. The Company began its operations by setting up a solvent extraction unit in Karachi. Later, in 2014 the Group set up Fahad Hammad (Pvt.) Limited in Karachi, Sindh with a production capacity of 108,000 MT of vegetable oil/ghee. Furthermore, in 2018 the Group has also set up AK Oil and Ghee Industry (Pvt.) Limited in Hattar, KPK, which has the capacity to produce 108,000 MT of vegetable oil/ghee per annum. Neelum Oil and Ghee Industries (Pvt.) Ltd, in Mirpur. It is a private limited company engaged in the production of Ghee and Cooking oil Subsequently, the combined production of the Group in the vegetable oil/ghee industry currently stands at 450,000 MT of vegetable oil/ghee per annum.

The Company is primarily engaged in the process of refining crude palm oil; producing and selling cooking oil/ghee along with shortening. Capacity utilization is dependent on the local demand and availability of crude palm oil which is primarily imported from Malaysia and Indonesia. The Company also sells shortening with an installed plant capacity of 90 MT per day and 32,400 Matric ton per annum with investment of Rs.28,324,992. The Company produced 88,678 MT of vegetable oil/ghee in FY24 and capacity utilization stood at ~82%. Following that, the production stood at 79,339 MT during FY25 and capacity utilization decreased, standing at ~73%. The Company is competing in the premium edible oil segment with ‘Fauji Supreme Banaspati’.

The Company’s majority ownership resides with group company, Waheed Hafeez Ghee Industries (Pvt.) Limited (~87%). The remaining shareholding resides with Mr. Abdul Waheed (~13%).

The Company’s ownership is notably stable, supported by the presence of its sponsoring family. This strong backing spans multiple economic sectors, including edible oil, hotels, Construction and development, and Terminals. Such a well-established foundation ensures the company’s continued growth and stability. Moreover, the Company has a strong customer base for shortening.

The Group has experienced business cycles in edible oil sector and have maintained their league since 30 years. Apart from edible oil, the sponsors also have presence in the transport, hotel, and energy sectors as well.

The Group mainly comprises of entities operating across the edible oil segment. Apart from the Group’s financial strength, the sponsors have sufficient net worth to support the Company in times of duress through other businesses including construction and terminal business.

The Company’s BoD comprises five Executive Directors. All five directors are from the sponsoring family. Lack of independent oversight and diversity indicates a room for improvement in the Company’s governance structure.

The BoD members are very well equipped with relevant business knowledge. Mr. Abdul Waheed has ~30 years of experience in the edible oil sector. Mr. Abdul Waheed has served as a primary liaison for many government and private agencies which includes and is not limited to Chambers of Commerce, Federations, Associations, and personal and government agencies. With sheer determination, teamwork, and vigor, Mr. Abdul Waheed has so far established 17 companies under the umbrella of Waheed Group of Companies. Mr. Awais Karni is one of the key directors of the group and has described himself as a seasoned veteran of the palm oil industry with an experience of more than 18 years and has credited himself with creating and managing various brands of cooking oil and ghee which includes our flagship premium brand, Fauji Supreme. During his adolescent years, Mr. Awais attended Beacon House School System and, to further his education, traveled abroad and graduated from the prestigious Everest College, Canada. Ms. Rubina Kausar also has above a decade of experience and are actively managing operations.

The Board does not have any sub-committees and meets informally to discuss pertinent matters at hand.

The external auditors of the Company, Nasir Javaid Maqsood Imran Chartered Accountants, have expressed an unqualified opinion on the financial statements of the Company for the year ended Jun-25. The firm has been QCR-rated by ICAP and is placed in ‘category B’ of SBP’s panel of auditors.

The Company’s organizational structure is designed with clear reporting lines, divided into three functions:- Production, Finance, and Sales & Marketing. Each function is overseen by its respective director or department head, who reports directly to the CEO. This structure ensures effective oversight and accountability across all areas of the company.

Khadija Edible oil's management comprises experienced professionals. Mr. Abdul Waheed- CEO, Mr. Abdul Waheed is a seasoned professional businessman with 50 years of experience in managing and maintaining an array of diverse businesses that include handling of special projects publicly and privately at senior executive levels. Mr. Abdul Waheed stepped into the cooking oil industry in 1988 and in 1993 established his own Cooking Oil & Banaspati factory by the name of Waheed Hafeez Ghee Industries. Since stepping into the Cooking Oil and Banaspati trade, Mr. Abdul Waheed has launched over 71 brands in the local and international market over the last 25 years. The Group CFO, Mr. Fawad Hassan, an FCA, has an overall experience of 23 years. His extensive experience suggests that he has been involved in diverse business environments, dealing with complex financial scenarios and adapting to the evolving needs of the Company and the industry.

There are no management committees in place. Management meets on a need basis to ensure the efficiency of the Company’s operations.

Customized software is installed which is used by the Company in order to generate standard reports.

To ensure operational efficiency, the Company has setup an internal audit function, which implements and monitors the policies and procedures of the Company.

The edible oil industry in Pakistan represents a significant segment of the country’s food and consumer goods sector, characterized by stable demand fundamentals and growing consumption levels. During FY25, total edible oil consumption increased by approximately 17.3% YoY to ~4.9Mn MT, supported by population growth and higher per capita consumption of ~20.3 KG/person. The sector, however, remains heavily reliant on imports, with nearly ~72.3% of domestic consumption fulfilled through imported edible oils, particularly palm oil, exposing industry players to international price volatility, exchange rate fluctuations, and global supply chain disruptions. The industry has demonstrated improving operational dynamics, with domestic edible oil production increasing by ~29.1% YoY in FY25, primarily driven by higher soybean oil processing following the government’s approval of GMO soybean imports. Going forward, improving macroeconomic indicators, relative PKR stability, and sustained consumer demand are likely to provide a supportive operating environment for the sector.

The Company being a small player in the edible oil industry of the country has a market share of ~2.3% in terms of revenue and ~3% in terms of vegetable oil/ghee production.

The Company's revenue is heavily concentrated in the sale of vegetable oil and ghee products, which contribute approximately 80% of total sales, followed by shortening (16%) and tolling income (5%). In FY25, the Company achieved a substantial year-on-year (YoY) revenue growth of approximately 4.1%, increasing its top line to PKR 28,638 million from PKR 27,512 million in FY24. This expansion was primarily driven by significant growth in the secondary segments: shortening revenue rose sharply to PKR 4,478 million (FY24: PKR 3,201 million), and tolling income also notably increased to PKR 1,342 million (FY24: PKR 838 million). Looking ahead, the Company is expected to sustain this upward revenue trajectory, although the overall growth rate and profitability will likely be tempered by macroeconomic inflationary pressures that continue to elevate input costs, thereby impacting pricing flexibility and margins.

The Company faces inherent foreign currency and commodity price risk due to its reliance on RBD Palm Olein imports, primarily sourced from Malaysia, where pricing is subject to global demand and supply volatility; consequently, implementing a robust hedging strategy for these international purchases is recommended to mitigate adverse price fluctuations. Operationally, the Company demonstrated significant margin improvement in FY25, with the Gross Profit Margin rising substantially to 8.7% from 5.4% in the previous year, a trend mirrored by the Operating Margin (up to ~8.1% from ~ 4.9%) and the Net Margin (increasing to 4.7% from 1.6%). This margin expansion was largely driven by favorable market dynamics in the latter half of the year—specifically, the moderation of elevated early 2025 prices due to easing inflation and a steadier exchange rate—and was structurally supported by the 4.1% revenue growth significantly outpacing the 0.4% incline in the Cost of Goods Sold (COGS). These factors collectively resulted in a sharp increase in Net Income, reported at PKR 1,334 million in FY25, compared to PKR 448 million in FY24.

The industry is positioned for sustainable long-term expansion as recent data reveals a consistent upward tick in sales, signaling a shift toward higher volumetric growth going forward. This positive momentum is underpinned by a stable exchange rate, which has proven vital for an industry highly reliant on imported raw materials. Consequently, the combination of rising consumer demand and a predictable cost environment establishes a solid foundation for the industry’s continued upward trajectory.

Khadija Edible Oil manages its liquidity and working capital primarily through a short-term running finance facility secured from a consortium of banks. The Company exhibited highly efficient working capital management in FY25, evidenced by a significant improvement in the Gross Working Capital Cycle, which compressed to 13 days (from 17 days in FY24). This improvement was driven by operational efficiencies in both inventory and receivables: Inventory Days were kept exceptionally low at just 4 days (FY24: 5 days), signaling effective just-in-time procurement and rapid finished goods turnover, while Receivable Days reduced to 9 days (FY24: 11 days), reflecting faster collection efforts. Concurrently, the Company maintained timely settlement of obligations, with Payable Days recorded at 3 days (FY24: 7 days). Consequently, the overall Net Working Capital Cycle remained stable and efficient, standing at 10 days in FY25, demonstrating optimal management of current assets and liabilities.

The Company significantly enhanced its operational cash generation and debt-servicing capability in FY25, marked by a substantial increase in Free Cash Flow from Operations (FCFO) to PKR 1,472 million (up from PKR 666 million in FY24). The improved leverage is attributable to both an increase in EBITDA to PKR 2,291 million (FY24: PKR 1,313 million) and a corresponding decline in Finance Cost to PKR 4 million (FY24: PKR 7 million). Furthermore, the Debt Payback metric improved to a favorable 0.3x in FY25 (from 0.6x in FY24), indicating that the Company can retire its outstanding debt with less than one year of current operating cash flow, collectively confirming a substantially strengthened cash flow profile and highly manageable debt burden.

The Company's debt structure is highly skewed towards short-term obligations, with approximately ~99.4% of its total debt comprising a running finance facility used primarily for funding working capital requirements. As of FY25, total debt had been reduced to PKR 2,011 million (from PKR 2,460 million in FY24), while the equity base substantially strengthened to PKR 4,140 million (FY24: PKR 2,807 million) due to an increase in unappropriated profits. This positive shift in the capital structure led to a significant improvement in the Debt-to-Debt Plus Equity ratio, which decreased to a more conservative ~32.7% as of FY25 (~46.7% in FY24), indicating a reduced reliance on leverage and an enhanced financial stability profile.