Karachi August 11 2023: FrieslandCampina Engro Pakistan Limited (FCEPL), profit grew 41 percent for the first half of the year, concluding on June 30th, 2023, according to company filing to the exchange.
Share price of the company drops PKR 1.66 or 2.44 percent at closing of Pakistan Stock Exchange.
Despite a challenging operating environment and economic slowdown, the Company delivered strong double-digit growth of 53 percent (revenue of PKR 47.0 billion against PKR 30.8 billion in the same period last year) fueled by volume growth, favorable portfolio mix, pricing management initiatives and distribution expansion.
The Company witnessed gross profit growth of 48% while gross margin declined by 49 bps due to high inflation, increase in energy prices, global geo-political environment, foreign exchange constraints and significant currency devaluation. However, while the gross margin declined, the operating margin improved by 80 bps over last year due to initiatives such as cost rationalization and driving efficiencies across the value chain.
Profit after tax (PKR 1.3 billion vs PKR 0.9 billion same period last year) as a percentage of sales declined by 23 bps due to significant increase in finance cost and taxation.
“Equipped with an agile business model, the management is confident in its ability to drive efficiencies across the value chain, build resilience and sustain growth by staying relevant to the consumer and offering a value for money proposition while managing profitability through optimum pricing and cost transformation” says Company Chief Executive Officer Ali Ahmed Khan.
Dairy based products segment reported a revenue of PKR 41.6 billion, reflecting a growth of 57 percent versus the same period last year. Olper’s, the flagship brand, led the growth in the segment by strengthening its market leadership position through consistent brand and trade investments.
Other brands, including Olper’s Cheese, Olper’s Flavored Milk, Olper’s Full Cream Milk Powder (FCMP), Olper’s Cream, and Tarang continued to grow in volume, distribution market share.
The segment reported a revenue of PKR 5.4 billion, reflecting a growth of 25 percent versus the same period last year. This growth has been enabled by timely planning and investment as well as the launch of innovative new products like Shahi Mango Stick, Mango Crush and Candy Pop stick.