Half-Year Results Show Resilience Amidst Inflation and New Tax Regulations
Karachi, Pakistan–
FrieslandCampina Engro Pakistan Limited (FCEPL) today announced its financial results for the first half of 2024, ending June 30th. The company demonstrated resilience in the face of a difficult economic environment, achieving a 17% increase in revenue compared to the same period last year. This growth was fueled by strategic portfolio adjustments, impactful market investments, and expanded distribution networks.
Key Highlights:
Revenue Growth: FCEPL achieved a 17% year-on-year revenue growth, reaching PKR 55.0 billion, compared to PKR 47.0 billion in the first half of 2023.
Gross Profit Margin Maintained: Despite inflationary pressures on commodity and energy prices, gross profit grew by 16%, showcasing the company’s ability to adapt and maintain margins.
Profit After Tax Impacted: Profit after tax declined by 6% to PKR 1.26 billion, compared to PKR 1.33 billion in the same period last year. This decline is primarily attributed to a significant increase in interest rates.
Strong Performance in Dairy-Based Products:
The dairy-based products segment, spearheaded by the flagship Olper’s brand, reported revenue of PKR 48.87 billion, reflecting an 18% growth year-on-year.
Olper’s Maintains Market Leadership: The “Happy Subah” campaign across television, digital, and in-store channels solidified Olper’s market leadership and brand equity.
Value-Added Brands Show Growth: Value-added products like Olper’s Cream, Olper’s Cheese, Dobala, and Tarka continued to gain traction despite competition.
Frozen Desserts Segment Shows Resilience:
Despite a challenging start to the year, the frozen desserts segment achieved a 13% growth in revenue, reaching PKR 6.16 billion.
“Wow Bharay Deserts” Campaign Drives Growth: The new campaign successfully expanded consumption occasions beyond traditional festivities.
Strong In-Store Execution: Effective in-store execution further contributed to the segment’s positive performance.
Addressing the Impact of New Sales Tax on Packaged Milk:
FCEPL expressed concerns about the recently imposed 18% sales tax on packaged milk. The company highlighted the potential negative impact on consumers already facing financial strain due to rising costs.
Potential Shift to Unregulated Loose Milk: The company emphasized the risk of consumers shifting to untaxed and unregulated loose milk, raising concerns about public health and safety.
Engagement with Stakeholders: FCEPL is actively engaging with stakeholders, including the Pakistan Dairy Association, to communicate the broader implications of the tax and advocate for adjustments.
Future Outlook:
FCEPL remains committed to its market-leading position and delivering high-quality products to Pakistani consumers. The company will continue to focus on:
Meeting Consumer Needs: Adapting to evolving consumer needs through innovative product offerings and targeted marketing initiatives.
Driving Efficiencies: Optimizing operations and investments across the value chain to enhance financial performance.
Creating Shareholder Value: Delivering sustainable growth and value creation for shareholders.
Upholding Sustainability and Safety Standards: Maintaining the highest standards of hygiene, food safety, and sustainability across all operations.
FCEPL, leveraging its 150 years of global expertise, remains dedicated to providing safe, affordable, and nutritious dairy products to millions of Pakistanis daily.
