February 20, 2024: FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for the year ended December 31, 2023. The Company continued its growth trajectory and delivered another record year with the highest-ever top line and operating profit. This was in the face of a challenging macro-economic environment and intense competition. The Company achieved a remarkable milestone, surpassing the PKR 100 billion topline mark with a 36% increase over last year.
The Company witnessed a gross profit growth of 18% while gross margin declined by 218 bps due to high inflation, global supply chain disruption, foreign exchange constraints and currency devaluation. However, operating margin declined by 115 bps over last year due to initiatives such as cost rationalization and efficiency building.
Profit after tax declined from PKR. 2.5 billion to PKR 1.5 billion in the same period last year due to a significant increase in finance cost, with interest rates almost doubling over the year. Brand health indicators had a positive trajectory, setting the stage for long-term sustainable growth.
Dairy & Dairy-based Products Segment
The segment reported a revenue of PKR 91.68 billion, reflecting a growth of 38.3% compared to the previous year. Olper’s led this growth by strengthening its market leadership position through brand and trade investments. Olper’s UHT Milk, Olper’s Cream, Flavored Milk and Tarang all experienced a high double-digit revenue growth.
Olper’s UHT continued to maintain its presence on air with its ‘Happy Mornings’ campaign across key touchpoints including TV, digital, social media, and in-store. In the last quarter, the brand launched the 1½ Pao Economy Pack, supported by an integrated marketing campaign across all relevant consumer touchpoints, establishing it as the ideal serving size for a single breakfast consumption occasion.
Olper’s flavored milk continued to drive presence on TV through it’s ‘No Break in Performance’ campaign, encouraging milk consumption in children. It also launched Olper’s All Stars, an animated film driving engagement with children through a relatable and engaging medium.
Frozen Desserts Segment
The segment reported a revenue of PKR 8.56 billion, demonstrating a growth of 19.2% compared to the previous year. The brand strategically invested in season-opening activities and capitalized on various festivities. Additionally, the business-maintained consumer excitement by introducing three new innovations during the year.
Financial Performance
The financial performance of the company for the year ended December 31, 2023, is summarized below:
Full year ended
Dec 31, 2023 Variation
(PKR. in million) 2023 2022
Net Sales 100,235 73,474 +36%
Operating Profit 6,117 5,331 +15%
% of sales 6.1% 7.3% -115 bps
Profit after tax 1,509 2,466 -39%
% of sales 1.5% 3.4% -185 bps
Earnings / (Loss) per share (PKR) 1.97 3.22
Future Outlook
The Company expects to face headwinds on both demand and supply sides due to inflationary pressures, declining consumer purchasing power and global supply chain disruptions. However, equipped with an agile business model, the management is confident in its ability to to drive efficiencies across the value chain, build resilience, and future proof the business to deliver growth by staying relevant to consumers.
Dedicated to Nourishing Pakistan and improving the livelihoods of farmers, the Company will continue to advance its exemplary Dairy Development Program, which is designed to ensure inclusive growth and increased profitability for the dairy farmers, including women farmers.
Continued investments in brand equity, conversion to packaged milk and product portfolio expansion will remain a priority. With this strategy and distinctive positioning further combined with enterprising talent and emerging methodologies, the Company is poised for the next chapter in the food safety and nourishment narrative in Pakistan.
Leveraging its global expertise and 150 years heritage, FrieslandCampina Engro Pakistan Limited remains committed to the highest standards of hygiene, food safety and sustainability, and will continue to provide safe, affordable, and nourishing dairy and dairy based products to millions of Pakistanis, every day.
