Karachi (Agencies): FrieslandCampina Engro Pakistan Limited (FCEPL) has announced its financial results for the first half of 2024, ending on June 30. Despite a challenging economic environment, the company achieved a 17% growth in revenue, reaching PKR 55.0 billion compared to PKR 47.0 billion in the same period last year. This growth was driven by a favorable portfolio mix, effective market investments, and distribution expansion.
The company also reported a 16% increase in gross profit, maintaining gross margins despite inflationary pressures on commodities and energy prices. This performance highlights FCEPL’s resilience and adaptability to market conditions. However, profit after tax declined by 6%, amounting to PKR 1.26 billion compared to PKR 1.33 billion in the same period last year, primarily due to a significant increase in interest rates.
- Dairy-Based Products Segment
The dairy-based products segment reported revenue of PKR 48.87 billion, reflecting an 18% growth compared to the same period last year. Olper’s UHT maintained its market presence with the ‘Happy Subah’ campaign across TV, digital, and in-store touchpoints. Value-added brands such as Olper’s Cream, Olper’s Cheese, Dobala, and Tarka continued to gain volume despite competition.
- Frozen Desserts Segment
The frozen desserts segment reported revenue of PKR 6.16 billion, a 13% growth compared to the same period last year. This growth was driven by continuous investment in the brand through the “Wow Bharay Deserts” campaign, which created consumption occasions outside traditional festivities and featured exemplary in-store execution.
- Financial Performance Summary
- Net Sales: PKR 55,024 million (17% increase from 2023)
- Operating Profit: PKR 4,003 million (3% increase from 2023)
- Profit After Tax: PKR 1,253 million (6% decrease from 2023)
- Earnings Per Share: PKR 1.63 (compared to PKR 1.73 in 2023)
- Future Outlook
Effective July 1, 2024, the government has imposed an 18% sales tax on packaged milk through the Finance Act, 2024. This statutory change has significantly increased the prices of packaged milk, adding financial strain on consumers. The disparity between taxed packaged milk and untaxed loose milk may drive consumers towards the latter, raising public health and safety concerns due to lack of regulation.
FCEPL is actively engaging with stakeholders through the Pakistan Dairy Association to communicate the broader impact of this tax. The company remains committed to maintaining its market position and ensuring the highest quality of products for its consumers. FCEPL will continue to respond to consumer needs through in-market initiatives, driving efficiencies across the value chain, and optimizing investments to enhance overall financial health, thereby generating greater value for shareholders.
Leveraging its global expertise and 150 years of heritage, FCEPL is dedicated to maintaining the highest standards of hygiene, food safety, and sustainability, providing safe, affordable, and nourishing dairy products to millions of Pakistanis every day.