FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for the year ending December 31, 2022.
The company’s profit after tax (PAT) grew by 37 percent to Rs. 2.46 billion as compared to Rs. 1.80 billion despite higher interest rates and the imposition of a super tax.
FCEPL delivered another record year with the highest-ever revenue and operating profit of Rs. 73.5 billion and Rs. 5.3 billion respectively. The sakes of the company grew by 41 percent over last year driven by volume growth, mix improvement, and expansion of the retail footprint despite aggressive competition and distribution challenges.
The company witnessed gross profit growth of 37 percent while the gross margin declined by 50 basis points due to higher commodity prices, the global geopolitical environment, foreign exchange constraints, Rupee devaluation, and floods.
While the gross margin has declined, the operating margin improved by 60 basis points over the last year due to initiatives such as cost rationalization and driving efficiencies across the value chain.
Earnings per share of the company were increased to Rs. 3.22 from Rs. 2.35
Dairy and Beverages
The segment reported a revenue of Rs. 66.3 billion, reflecting a growth of 41 percent versus last year. Olper’s led the growth in the segment by strengthening its market leadership position through brand and trade investments. Olper’s UHT Milk, Olpers Cream, Dobala, Flavoured Milk, and Tarang all posted a double¬ digit growth
The segment deployed various physical availability initiatives along with capitalizing on category captaincy in the Modern Trade channel. Through targeted consumer promotions, investment in trade activations, and consumer engagement, FCEPL’s retail footprint expanded by 4500+ outlets. The Company accelerated its profitable growth by driving its Value-Added Brands in the market.
Ice cream and Frozen Desserts
The segment reported a revenue of Rs. 7.18 billion, reflecting a growth of 37 percent versus last year. The business invested in season-opening activities and capitalized on all festivities through best-in-class service and expansion of the trade universe by inducting more assets in the market.
Future Outlook
The business environment remains challenging amongst rising inflation, foreign exchange constraints, currency devaluation, higher finance cost, and imposition of Super Tax. Moreover, rising natural disasters due to climate change and dynamic consumer needs may affect the business’s ability to serve consumers effectively. However, the Company will continue to remain agile and drive efficiencies across the value chain to deliver growth. The business will continue to invest in brand equity and expand its profit-accretive portfolio to leverage margins.
