FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for Q1, 2024, delivering a strong topline growth of 21% (PKR 27.5 billion compared to PKR 22.7 billion in the same period last year) despite the challenging operating environment and economic slowdown. This increase was fueled by volume growth and relevant consumer offerings.
The Company witnessed a gross profit growth of 1%, while gross margin declined by 320 bps due to currency devaluation and inflationary pressure on commodities and energy prices.
Profit after tax (as a percentage of sales) declined by 200 bps over LY (Rs. 0.67 billion vs. Rs. 0.99 billion in the same period last year) due to an increase in interest rates.
DAIRY-BASED PRODUCTS SEGMENT
The segment reported a revenue of Rs. 26.1 billion, reflecting a growth of 15% compared to the same period last year. The growth was led by our flagship brand Olper’s, through consistent brand building and trade activities.
Olper’s continued to expand the reach of its 1½ Pao Bachat Pack Campaign through TV and Digital channels. The Olper’s 1½ Pao Bachat Pack, an ideal size for a single breakfast occasion, provides the right milk quantity needed for a family’s daily breakfast needs.
Our value-added brands like Olper’s Cream, Olper’s Cheese, Dobala, and Tarka have continued to gain volume despite competition from established players.
FROZEN DESSERTS SEGMENT
The segment reported a revenue of Rs. 1.36 billion compared to Rs. 1.44 billion period last year. The recent challenging times and a delayed summer onset, coupled with an unexpected rainy season across the Country, impacted the expected growth. However, the Company anticipates a quick recovery in Q2 as the season fully commences.
FINANCIAL PERFORMANCE
The financial performance of the company for the three months ended March 31, 2024, is summarized below:
| Three months ended | Variation | ||
| (Rs. in million) | 2024 | 2023 | |
| Net Sales | 27,464 | 22,651 | 21% |
| Operating Profit | 1,971 | 1,982 | -1% |
| % of sales | 7.18% | 8.75% | -157 bps |
| Profit / (Loss) after tax | 665 | 990 | |
| % of sales | 2.42% | 4.37% | -195 bps |
| Earnings / (Loss) per share (Rs.) | 0.87 | 1.29 | |
FUTURE OUTLOOK
FCEPL maintains its dedication to delivering strong business results for its shareholders, despite external challenges like inflation, currency devaluation and elevated interest rates. The company’s agile business model enables the management to maintain growth through operational efficiency and adapting to changing consumer demands. In the future, FCEPL plans to continue investing in enhancing brand value and broadening its portfolio to improve profit margins.
Leveraging its global expertise and 150 years heritage, FCEPL remains committed to the highest standards of hygiene, food safety and sustainability and providing safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.
The Company’s Annual General Meeting was held on April 26th, 2023 at the Royal Rodale in Karachi, where the shareholders and the Board of Directors discussed the Company’s performance in 2023.
Also Read: Ahsan Zafar Syed assumes the office President & CEO of Engro Corporation
