FrieslandCampina Engro Pakistan Limited (FCEPL) has announced impressive financial results for the first half of 2024. Despite economic challenges, the company achieved a 17% revenue growth, reaching PKR 55 billion. This growth was driven by a strategic product mix and expanded market reach.
While gross profit increased by 16%, profit after tax declined by 6% due to higher interest rates. However, FCEPL’s dairy-based products segment, led by the iconic Olper’s brand, saw a remarkable 18% growth. The frozen desserts segment also contributed positively with a 13% growth.
FCEPL’s commitment to innovation and consumer-focused strategies has been instrumental in driving its success. The company’s ability to navigate a challenging economic landscape while delivering strong financial performance is a testament to its resilience and market leadership.
Financial Performance
The financial performance of the company for the three months ended June 30, 2024, is summarized below:
| Rs. in millions | 2024 | 2023 | Variation |
| Net Sales | 55,024 | 47,015 | 17% |
| Operating Profit | 4,003 | 3,873 | +3% |
| % of sales | 7.3% | 8.2% | -96 bps |
| Profit / (Loss) after tax | 1,253 | 1,326 | |
| % of sales | 2.3% | 2.8% | -54 bps |
| Earnings / (Loss) per share (Rs.) | 1.63 | 1.73 |
Future Outlook
Sales tax on packaged milk – Effective July 1, 2024
Through the Finance Act, 2024, the Government has imposed an 18% sales tax on the sale of packaged milk. This statutory change has resulted in a significant increase in the prices of packaged milk. As milk is a necessity, this price increase will add more financial strain on consumers who are already struggling with declining purchasing power.
Furthermore, this change has widened the gap between packaged milk and loose milk, the latter of which remains untaxed and unregulated. This disparity may drive consumers towards loose milk, which could have implications for public health and safety due to the lack of regulation.
The Company is actively engaging with relevant stakeholders through the Pakistan Dairy Association to communicate its position and inform them of the broader impact by highlighting how this tax will affect various Government priorities, including ensuring nutrition for all and expanding the documented economy.
FCEPL remains committed to maintaining its market position and ensuring the highest quality of products for its consumers. The Company will continue to respond to consumer needs through in-market initiatives and by offering relevant product propositions while driving efficiencies across the value chain and optimizing investments to enhance the overall financial health of the business, thereby generating greater value for our shareholders.
Leveraging its global expertise and 150 years of heritage, FCEPL remains committed to the highest standards to hygiene, food safety and sustainability and providing safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.
