𝐅𝐂𝐁𝐋 𝐌𝐚𝐫𝐤𝐬 𝐌𝐚𝐣𝐨𝐫 𝐑𝐞𝐜𝐨𝐯𝐞𝐫𝐲 𝐖𝐢𝐭𝐡 𝐒𝐭𝐫𝐨𝐧𝐠 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐀𝐧𝐝 𝐒𝐞𝐫𝐯𝐢𝐜𝐞 𝐎𝐮𝐭𝐜𝐨𝐦𝐞𝐬

…𝒄𝒐𝒎𝒑𝒂𝒏𝒚 𝒑𝒐𝒔𝒕𝒔 𝒏𝒖 60.73 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 𝒑𝒓𝒐𝒇𝒊𝒕 𝒂𝒇𝒕𝒆𝒓 𝒚𝒆𝒂𝒓𝒔 𝒐𝒇 𝒍𝒐𝒔𝒔𝒆𝒔 𝒂𝒏𝒅 𝒆𝒙𝒄𝒆𝒆𝒅𝒔 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒍 𝒕𝒂𝒓𝒈𝒆𝒕𝒔

By Kezang Choden

The Food Corporation of Bhutan Limited (FCBL) has recorded a significant financial turnaround in 2024, according to its latest annual report. After enduring six consecutive years of losses between 2017 and 2022, with the largest loss of Nu 112.04 million registered in 2020 due to the operation of farm shops, the company posted a profit of Nu 25.10 million in 2023. This upward trend continued into 2024 with a reported profit of Nu 60.73 million, more than double the previous year’s figure.

Revenue also saw strong growth across the company’s primary income streams. In 2024, sales revenue increased by 22.48 percent, reaching Nu 2,832.47 million, while revenue from service charges rose by 22.53 percent to Nu 2,891.53 million. Although other income experienced a slight decline of 5.44 percent, the overall financial performance showed a marked improvement, indicating operational stability.

Cash outflows, which had increased from 2022 to 2023, showed notable improvement in 2024. The change reflects more efficient financial management and suggests a recovering financial position. An analysis of key financial ratios over the past years indicates both strengths and areas requiring continued attention. The current ratio and quick ratio both decreased due to a rise in current liabilities. Meanwhile, the net fixed assets to equity ratio increased, driven by a rise in the value of property, plant and equipment.

Other key indicators also shifted. Debtor turnover in days increased due to higher trade receivables, while inventory turnover in days declined, reflecting improved revenue turnover. Creditors turnover in days decreased following a rise in trade payables.

Chief Executive Officer Dorji Tashi said the company’s financial recovery followed focused strategies after years of instability. “We have managed to make a much-needed financial turnaround after six consecutive years of varying losses,” he said. He credited the progress to government support, the cooperation of stakeholders and the commitment of the FCBL team, both past and present.

The company’s financial improvement was built around two main priorities: optimizing expenses and enhancing revenue. “Any initiatives we undertook were aimed precisely at contributing to these two areas,” the CEO said.
As part of its expense optimization strategy, FCBL encouraged multi-tasking among employees to reduce human resource costs. The organization also fully transitioned to e-governance and improved inventory practices by removing poor-performing or dormant items. It further reduced the use of pool vehicles and closed loss-incurring outlets.
On the revenue side, the company restructured its business management approach, leading to increased revenue from the export of agricultural products and the distribution of essential food items within Bhutan. “In addition to these efforts, our efficient investment decisions, though short-term in nature, have contributed positively to our income,” Dorji Tashi added.

The Annual Performance Compact (APC), a yearly agreement signed between the Chief Executive Officer and the Ministry of Finance, served as a guiding document for the company’s operations in 2024. The compact allocated 60 percent of its focus on financial targets and 40 percent on non-financial performance indicators. The financial component included six key metrics: revenue, expense, profit after tax, operational efficiency, revenue per employee, and return on equity.

FCBL set a revenue target of Nu 2,571.30 million for 2024, reflecting a six percent increase from the previous year. The company exceeded this target by Nu 1.2 million, achieving a total revenue of Nu 2,982.50 million. Overall, FCBL successfully met all of its financial targets for the year. In the non-financial category, the company achieved 92.85 percent of its objectives. These were divided across five performance areas: customer satisfaction (15 percent), digitalization and automation (15 percent), company-specific or industry benchmarks (15 percent), risk and control (15 percent), and organizational capacity, learning and growth (10 percent).

In terms of service delivery, FCBL facilitated the marketing of 15,887 metric tonnes of agricultural products in 2024, valued at Nu 737 million. The company also ensured the timely supply of rations to 494 schools across Bhutan and maintained the national food reserve throughout the year. According to management, these achievements reflect the organization’s commitment to national food security and effective service delivery.

Financially, the company reported an increase in revenue from Nu 2.42 billion in 2023 to Nu 2.97 billion in 2024, an improvement of Nu 556 million or 23 percent. Profit after tax rose from Nu 25 million in 2023 to Nu 62.05 million in 2024, marking an increase of Nu 38 million or 147 percent. These improvements were attributed to better operational efficiency, cost control and strategic coordination among stakeholders.

Further analysis of financial indicators showed continued gains. The inventory turnover ratio improved from 42 percent to 36.25 percent, reflecting better inventory management. The return on equity ratio increased from 3.3 percent to 6.1 percent, and the net profit margin rose from 1.22 percent to 1.96 percent. Operational efficiency also improved, with key processes becoming more streamlined and cost-effective.

Management stated that these results are the outcome of targeted interventions and reengineered business practices. The official noted that while maintaining the same rate of progress will be challenging, it is achievable with continued focus. He added that if the current trend continues, FCBL is on track to become a stable, financially secure and socially responsible organization.