Friesland Campina profit rises 37 percent in 2022

KARACHI: Friesland Campina Engro Pakistan Limited (FCEPL) on Thursday reported a 37 percent rise in its annual profit on an increase in the company’s revenue from contracts with customers and other income.

In a statement to the Pakistan Stock Exchange (PSX), the company (formerly Engro Foods Limited) reported a net profit of Rs2.465 billion for the year that ended December 31, up from Rs1.804 billion during the same period the year earlier.

The company skipped any payout for the period.

Earnings per share (EPS) came in at Rs3.22 a share, compared with Rs2.35 a share last year.

Friesland Campina said its net sales for the year rose to Rs73.473 billion, compared with Rs52.094 billion a year earlier. Its cost of sales increased to Rs61.365 billion during the period against Rs43.256 billion.

FCEPL delivered a record year with highest ever topline and operating profit of Rs73.5 billion and Rs5.3 Billion respectively. The topline grew by 41 percent over the last year, driven by volume growth, mix improvement, and expansion of the retail footprint.

The company witnessed gross profit growth of 37 percent while the gross margin declined by 50bps on higher commodity prices, global geo-political environment, foreign exchange constraints, rupee devaluation, and floods.

While the gross margin has declined, the operating margin improved by 60bps over last year due to initiatives such as cost rationalisation and driving efficiencies across the value chain.

The profit after tax grew by 37 percent despite higher interest rates and imposition of super tax.

FCEPL dairy and beverages segment reported revenue of Rs66.3 billion, reflecting a growth of 41 percent versus the 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 ice cream and frozen desserts segment reported revenue of Rs7.18 billion, reflecting a growth of 37 percent versus the last year.

According to FCEPL, the business environment remained 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 might affect businesses’ ability to serve the consumers effectively.

However, the company added, it will continue to invest in brand equity and expand its profit accretive portfolio to leverage margins.

The company said it would expand upon its partnership with the Pakistan Dairy Association (PDA) and the government to educate the consumers on the potentially hazardous effects of loose milk, and positive features of safe, packaged milk.

Engro Fertilizers full-year profit down 24pc

Engro Fertilizers reported a 24 percent decline in its annual profit on an increase its cost of sales.

In a statement to the PSX, the company reported a net profit of Rs16.003 billion for the year that ended December 31, down from Rs21.092 billion during the same period the previous year.

The company also announced a final cash dividend of Rs5 per share, which is in addition to the interim dividend already paid at Rs8.50 per share.

EPS came in at Rs11.98 a share, compared with Rs15.80 a share last year.

The company said its net sales for the year rose to Rs157.016 billion, compared with Rs132.363 billion a year earlier.

The cost of sales increased to Rs114.169 billion during the period against Rs88.28 billion, which decreased the profit margins.