FrieslandCampina Engro Pakistan announces Q3, 2022 results
Oct 24, 2022: FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for Q3, 2022. The Company reported revenue of PKR 52.8 billion for the nine months ended, showcasing 37% increase versus same period last year, led by volume growth, mix improvement and distribution expansion.
Operating profit reflected a growth of PKR 500 million vs last year. However, the business witnessed decline in profit after tax of Rs 194 million vs last year (Rs 1,765 million vs Rs 1,959 million) on the back of higher finance cost due to increase in interest rates and higher taxation due to imposition of Super Tax.
Dairy and beverages
With a growth of 36.4% versus last year, the segment reported a revenue of Rs. 46.1 billion. Olper’s led the growth in the segment along with strengthening its market leadership position through consistent brand building and trade activities.
Significant expansion was witnessed in the retail footprint and E-Commerce channel during the quarter. The segment will continue to explore new channels and route to markets to serve its customers effectively and efficiently.
The ‘Happy Mornings’ campaign by Olper’s UHT is resulting in strengthening the brand’s equity and accelerating conversion from loose milk.
Leveraging FrieslandCampina’s global expertise to introduce new products and innovations as a key driver of future business growth, the Company recently launched Olper’s Cheese. In August 2022, Olper’s Flavoured Milk launched its new campaign ‘No Break In School Performance’.
The Company’s other products like Olper’s full cream milk powder (FCMP), Olper’s Cream and Tarang have also gained healthy market shares despite strong competition.
Ice Cream and Frozen Desserts
With a growth of 37.9% versus last year, the segment reported a revenue of Rs. 6.8 billion. This growth was enabled by segment’s investment behind season opening activities and expansion of the trade universe by inducting more assets in the market.
To give consumers an experience of a value-added offering, a dual chocolate flavored product with chocolate sauce and chocolate chips, the Omore Double Choco Chips Cone has been launched at an accessible price point in 2022.
Financial performance & table
The financial performance of the company for the quarter ended September 30, 2022 is summarized below:
| Nine Months ended
September 30, 2022
|(Rs. in million)||2022||2021|
|% of sales||7.3%||8.7%||-140 bps|
|Profit / (Loss) after tax||1,765||1,959|
|% of sales||3.3%||5.1%||-180 bps|
|Earnings / (Loss) per share (Rs.)||2.3||2.56|
Sustainability & CSR
In light of the recent floods in Pakistan, FCEPL undertook flood relief efforts to support the affectees in Sindh and Balochistan with food, shelter and free animal treatment camps.
To regenerate the environment, FCEPL partnered with the World Wide Fund for Nature (WWF-Pakistan) on a tree plantation initiative to increase local resilience to climate change and increase tree cover.
Rising inflation, currency devaluation and restrictive monetary policies continue to put pressures on the Company’s profitability. Moreover, imposition of Super Tax will impact the formal sector thus impacting the government’s ability to collect taxes in the long run. However, with an agile business model in place, the management is confident that it will be able to drive efficiencies across value chain and continue to deliver growth.
FCEPL’s purpose is to transform the health and well-being of Pakistanis, now and for generations to come. Leveraging the global expertise and heritage which spans 150 years, FCEPL remains committed to the highest standards of hygiene, food safety and sustainability to provide safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.