FrieslandCampina Engro Pakistan Limited Financial Results

Karachi l: FrieslandCampina Engro Pakistan Limited announced its financial results for the nine months ended September 30th, 2021.

The Company reported net revenue of PkR 38.7 billion, representing 19% growth versus last year. This milestone was attained by developing new channels, increasing market penetration, improving route to market, and enhancing investment across brands.

These initiatives reflect Friesland Campina Engro Pakistan Limited’s unwavering commitment to provide all-purpose nutrition across Pakistan.

The business environment faced unprecedented economic challenges due to currency devaluation and all-time high commodity prices. 

However, the Company has effectively navigated through these challenges to grow sales volumes, and simultaneously improve Gross Margin by 403bps versus last year through continued focus on mix management and saving initiatives throughout the value chain.

Furthermore, effective controlling of other costs, reduced rate of borrowing and effective working capital management has led to an improvement in profit after tax by 407bps versus last year.

On September 8th, FrieslandCampina, one of the largest dairy cooperatives globally, celebrated its milestone 150-year anniversary of delivering superlative dairy products and nutritional excellence.

In line with this long-standing commitment, during the year FrieslandCampina Engro Pakistan Limited along with the Pakistan Dairy Association has renewed its efforts of creating mass awareness around nutrition and safe milk consumption.

The Company also inaugrated a Farmer Helpline to facilitate existing and potential dairy farmers.  Additionally, the Company partnered with financial institutions to launch a digital “Supplier Financing Solution” with the aim to fuel growth for the SME sector by supporting the working capital requirements of small businesses.
DAIRY AND BEVERAGES SEGMENT: With COVID-19 related restrictions easing, the segment reported net revenue of PkR 33.8 billion registering 16.8% growth compared to the same period last year.

The improvement was achieved by adding 6000 stores to the retail network during the year, coupled with 14X growth in e-commerce volumes. Olper’s and its value-added products (Cream and Flavored Milk) led this growth with strong brand and trade investments.
With the strategic aim of improving accessibility and sustainability, the Olper’s economy pouch was launched at a PkR 50 price point in Pakistan. This innovative, multi-serve pack offers a strong value proposition which enables consumers to experience the natural goodness of milk in a safe, healthy, and affordable manner.

Other recent launches include Olper’s Flavored Milk, Olper’s Full Cream Milk Powder (FCMP), Olper’s Creams, Olper’s Pro-Cal, Tarang Tea Whitening Powder (TWP) and Tarang Elachi, all of which have gained a healthy market share in a short span of time despite strong competition from established players.

The Company will continue to leverage FrieslandCampina’s global expertise to introduce new products and innovations as a key driver of future business growth.
ICE CREAM AND FROZEN DESSERTS SEGMENT: The Easing of COVID restrictions and an early start of the summer have led to highest-ever volumes in the nine months, with reported growth of 41.7% and revenue of PkR 4.9 billion versus last year.

The business segment created excitement by launching 4 new products, and its buzz-generating “summer blockbuster” and “wow bhara bite” campaigns. Increased usage of e-commerce continues to improve the breadth and depth of its customer base.

As part of expanding its trade footprint across Pakistan, the category has also successfully inducted several cabinets and trikes.
FINANCIAL PERFORMANCE: The financial performance of the company for the nine months ended September 30th, 2021, is summarized below:
FUTURE OUTLOOK: Inflation is likely to continue increasing due to higher domestic energy price, international oil price and global commodity prices, which in turn puts pressure on the exchange rate. In addition to its existing plans, the Company will continue to remain agile and drive efficiencies to off-set external impacts.
FrieslandCampina Engro Pakistan Limited will continue to strengthen its ties with both, the Pakistan Dairy Association, and the Government by supporting multiple, consumer-focused, educational initiatives on the potentially hazardous effects of loose milk, and increase awareness of the positive features of safe, packaged milk.
The Company will continue to drive business growth by strengthening its brand equity, accelerating innovation, and expanding its portfolio.
FCEPL remains committed to the highest standards of hygiene, food safety and sustainability and will continue to leverage its global expertise and 150+ years of heritage to provide safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.

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