Karachi: FrieslandCampina Engro Pakistan Limited (FCEPL) has announced a robust financial performance for the first half of 2024, achieving a 17% increase in revenue amidst a difficult economic landscape. The company also maintained its gross profit margins despite inflationary pressures, although its net profit saw a decrease.
According to FrieslandCampina Engro Pakistan Limited, the company’s revenue reached PKR 55.0 billion, up from PKR 47.0 billion during the same period last year, driven by a favorable product mix, effective market investments, and distribution expansion. However, the profit after tax declined by 6%, amounting to PKR 1.26 billion compared to PKR 1.33 billion previously, largely due to a significant rise in interest rates.
The dairy-based products segment, which includes brands like Olper’s UHT milk and Olper’s Cream, reported an 18% revenue growth, totaling Rs. 48.87 billion. The company attributed this success to strong marketing campaigns and consistent consumer engagement. Meanwhile, the frozen desserts segment, despite a challenging start, grew by 13% with revenue of PKR 6.16 billion, bolstered by strategic advertising and exceptional in-store execution.
The financial statement details reveal that while the operating profit slightly increased by 3% to PKR 4.003 billion, the overall profit margins contracted slightly due to the broader economic factors impacting operational costs.
Looking forward, FCEPL faces new challenges with the imposition of an 18% sales tax on packaged milk starting July 2024, as stipulated by the Finance Act, 2024. This tax is expected to place additional financial burdens on consumers and could potentially shift consumer preferences towards untaxed loose milk, posing public health risks. The company is actively engaging with stakeholders through the Pakistan Dairy Association to mitigate the impact of this tax on consumers and the industry.
FCEPL remains dedicated to leveraging its global expertise and longstanding heritage to deliver high-quality dairy products to the Pakistani market, ensuring food safety, hygiene, and sustainability.