FrieslandCampina Engro Pakistan Limited announces Financial Results for H1 2022
FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for the six months ended June 30, 2022. The Company reported a revenue of PKR 30,771 million, a 25% increase year-over-year. The growth was led by robust volume growth for both – Dairy & Beverages and Ice Cream & Frozen Desserts segments, as well as improvement in portfolio mix.
Despite steep increases in commodity costs due to soaring inflation, and the rapid, unprecedented devaluation of the Pakistani Rupee, gross profit grew by 2% even though margins declined. Increased interest rates and imposition of the Super Tax in Budget 2022-23 applied further financial pressure. The Company registered a Profit After Tax (PAT) of PKR 938 million against PKR 1,414 million for the same period last year.
Dairy and Beverages
With a growth of 23.4% versus last year, the segment reported a revenue of Rs. 26.4 billion. Olper’s, our flagship brand, 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 channels during the period. The segment will continue to explore new channels and routes to market to serve its customers effectively and efficiently.
In Q1 2022, Olper’s UHT new campaign expanding on the theme of “Happy Mornings” was launched, which is already resulting in strengthening the brand’s equity and accelerating conversion from loose milk.
Olper’s Cream also launched a new copy refreshing its association with the morning occasion. The campaign not only focuses on Olper’s cream’s nutritional credentials as a morning spread but also highlights its versatility for other key occasions.
The Company continues to leverage FrieslandCampina’s global expertise to introduce new products and innovations as a key driver of future business growth. The Company is focusing its attention on exploring new opportunities to offer breakthrough products that fulfill its consumer needs particularly around the morning occasion.
The Company’s other products like Olper’s Flavored Milk, Olper’s full cream milk powder (FCMP), Olper’s Pro-Cal and Olper’s Cream have also gained a healthy market share in a short span of time despite strong competition from established players.
Ice Cream and Frozen Desserts
With a growth of 39% versus last year, the segment reported a revenue of Rs. 4.4 billion. This growth has been enabled by the 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, Omore Double Choco Chips Cone was launched at an accessible price point in 2022.
Omore signature thematic campaign “Wow Bhara Bite” continues to be on air and is the perfect expression of what Omore stands for as a brand – the purveyors of tasty, creamy treats in a wide variety of formats, which can be enjoyed by people of all ages – from kids & youth to adults.
| Six Months ended|
June 30, 2022
|(Rs. in million)||2022||2021|
|% of sales||7.4%||9.7%||230 bps|
|Profit / (Loss) after tax||938||1,414|
|% of sales||3.0%||5.8%||270 bps|
|Earnings / (Loss) per share (Rs.)||1.22||1.84|
FCEPL was recognised internationally for its sustainability initiatives when it won the Gold Standard Award 2022 for Corporate Citizenship (CSR and Sustainability) by the Public Relations & Communications Association Asia Pacific (PRCA APAC) at a ceremony in Singapore. Our Dairy Development Program, an initiative designed to increase inclusion, profitability and quality for dairy farmers, is integrating sustainability into the dairy value chain and playing a transformative role in Pakistan’s dairy sector.
School Milk Program
The Company is collaborating with the University of Education and UVAS to implement a pilot school milk program in Punjab. Encompassing over 8000 students in 89 primary government schools of Attock and Sheikhupura, the program aims to evaluate the impact of provision of milk on the health and academic performance of children.
The business environment remains challenging due to rising inflation and currency devaluation. However, with an agile business model in place, the Company will continue to drive efficiencies across the value chain and deliver growth.
Our purpose is to transform the health and well-being of Pakistanis, now and for generations to come. Leveraging our global expertise and heritage which spans 150 years, FrieslandCampina Pakistan remains committed to the highest standards of hygiene, food safety and sustainability. We will continue to provide safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.