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FrieslandCampina Engro Pakistan Limited (FCEPL) has announced its financial results for the year ended December 31, 2025, reporting strong profit growth despite continued challenges in the dairy sector.
The company posted a 22% increase in profit after tax, reaching Rs. 2,691 million compared to Rs. 2,203 million in 2024. Earnings per share also improved to Rs. 3.51 from Rs. 2.87 last year.
However, net sales declined slightly by 2.4% to Rs. 104,452 million, compared to Rs. 107,051 million in 2024.
Operating Profit Up 16% in FY2025
Operating profit rose by 16% to Rs. 7,936 million, compared to Rs. 6,835 million in the previous year. As a percentage of sales, operating profit improved to 7.6%, up from 6.4% in 2024.
The company credited this performance to disciplined cost management and efficiency initiatives across its value chain. These measures included optimization of procurement, manufacturing, logistics, and overhead costs while maintaining high standards of quality, safety, and service.
The combined impact of improved commercial execution and cost optimization helped expand gross margins by 70 basis points.
Sales Tax Impact Remains a Key Challenge
Despite improved profitability, the company highlighted that the implementation of an 18% sales tax on packaged UHT milk in 2024 continues to create an uneven playing field for the organized dairy sector.
According to FCEPL, loose milk remains outside the tax net and the documented economy. The company stated that this tax structure is not aligned with the government’s objectives of promoting safe and nutritious food, strengthening documented supply chains, and supporting dairy farmers.
Management also noted that the current tax regime limits the ability of organized dairy companies to invest in category development, dairy development programs, and long-term farmer support initiatives.
Market Share Gains Despite Pressure
Despite external challenges, FCEPL continued investing in its brands and customer-focused offerings. These efforts resulted in improved market share and a better volume mix.
The company emphasized that it remains committed to providing safe, affordable, and nutritious dairy products to millions of consumers across Pakistan.
Future Outlook
Looking ahead, FrieslandCampina Engro Pakistan said it will continue focusing on affordability, cost efficiency, and supply chain optimization. The company also plans to engage with government stakeholders to advocate for a more balanced taxation policy for packaged dairy products.
Management believes that a fair tax regime, aligned with international practices, would help promote food safety, formalization of the economy, and sustainable growth of the dairy sector.
Despite ongoing tax-related pressures, the company expressed confidence in the strength of its business foundations and long-term growth strategy.
