WNAM REPORT: FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for the first quarter ended 31st March 2025.
The Company continued to navigate a tough operating environment post the imposition of sales tax on UHT milk, from July 1, 2024. The lack of a level playing field versus loose milk continued to drive the safe packaged milk volumes downward, shifting consumption towards unsafe loose milk. Consequently, net sales declined by 5.3% to PKR 26.0 billion (Q1 2024: PKR 27.5 billion). The improvement in profit after tax of PKR 420 million was mostly driven by a reduction in finance costs, supported by optimized working capital and lower interest rates.
Despite lower volumes, the Company maintained its focus on cost optimization, operational efficiencies, and disciplined management of discretionary expenditures. This ensured a self-funding business model for the Company to continue its mission of conversion from loose milk.
DAIRY-BASED PRODUCTS SEGMENT
Revenue from the Dairy-Based Products segment stood at PKR 23.7 billion, representing a 9.1% decline compared to the same period last year. This was primarily attributable to the impact of sales tax on UHT milk.
FROZEN DESSERTS SEGMENT
The Frozen Desserts segment recorded revenue of PKR 2.28 billion, reflecting a significant growth of 67.7% over the corresponding period last year (PKR 1.36 billion). This performance was supported by Eid falling in the first quarter and sustained momentum from the previous year.
FINANCIAL PERFORMANCE
The financial performance of the company for the three months ended March 31, 2025, is summarized below:
Three months ended Variation
(Rs. in million) 2025 2024
Net Sales 26,016 27,464 -5.3%
Operating Profit 2,222 1,971 +12.8%
% of sales 8.54% 7.18% +137 bps
Profit / (Loss) after tax 1,085 665
% of sales 4.17% 2.42% +175 bps
Earnings / (Loss) per share (Rs.) 1.42 0.87
FUTURE OUTLOOK
The imposition of sales tax on UHT milk remains a challenge to the formal dairy sector – reducing affordability and impeding growth. However, the Company will continue to actively engage with key stakeholders to advocate for tax reform aligned with global benchmarks, ensuring fair competition with loose milk.
Drawing upon FrieslandCampina’s global expertise and 150+ years of dairy heritage, the Company remains steadfast in its commitment to quality, safety, and sustainability while providing millions of Pakistanis with safe, nutritious, and affordable products every day , upholding its mission to nourish the nation with care.
The Company’s Annual General Meeting was held on April 21st, 2025 at the Royal Rodale in Karachi, where the shareholders and the Board of Directors discussed FCEPL’s performance in 2024.
