KARACHI: Friesland Campina Engro Pakistan Limited (FCEPL) announced its financial results for the half year ended June 30, 2021. The Company reported revenue of Rs24.6 billion registering 22 percent growth over last year, on the back of strengthened distribution and increased availability of products, in addition to ongoing investment in brands.
The consecutive quarter-on-quarter growth reflects a wider footprint of our portfolio of brands across Pakistan.
The business climate remained challenging with record inflation leading to a steep increase in commodity prices. The Company has managed to offset these spikes and improve Gross Margin by 350bps over last year through several innovation-related and saving initiatives spanning the entire value chain. The resultant profit after tax shows an improvement of 430bps versus last year, primarily due to a reduction in finance cost of 47 percent, as a result of reduced rates and effective management of working capital.
DAIRY AND BEVERAGES: With restrictions and lockdowns gradually lifting, the segment reported a revenue of Rs21.4 billion, growing 17.6 percent compared to the same period last year. The improvement was spearheaded by Olper's, which has grown consistently due to strong brand and trade investments. The segment continues to build and invest in newer channels to serve consumers effectively.
With a focus on improving accessibility, and sustainability, the Olpers Economy Pouch was launched at Rs50 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 Cream, 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 Friesland Campina's global expertise to introduce new products and innovations as a key driver for future business growth.
ICE CREAM AND FROZEN DESSERTS: Pre-emptive out-of-home activities and an early start to the summer have led to our highest-ever volumes in the first half of the year, with growth of 63.6 percent versus last year and revenue of Rs3,148 million versus a revenue of Rs1,924 million in the same period 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 our customer base.
FUTURE OUTLOOK: The Dairy Industry welcomes the Government's initiative of restoring Zero Rating on Milk through recent Finance Act. At Friesland Campina Engro Pakistan Limited, our purpose is to transform the health and well-being of Pakistanis now and for generations to come. This change enables us to better serve our purpose by developing new products, improving accessibility and availability, and investing in public awareness campaigns - in partnership with the Pakistan Dairy Association and the Government of Pakistan, to accelerate the conversion to safe, hygienic, nutritious packaged milk, and thereby improve public health.
This support from Government also enables us to contribute more towards our Dairy Development Program, which is designed to ensure inclusive growth of our nationwide dairy farmer network, by providing knowledge and training in yield management, best farming and veterinary practices, as well as support in capital investment which cumulatively results in a better livelihoods for our farmers; a core component of our corporate purpose.
With higher yields from farmers and increased acceleration in conversion to packaged milk, the company foresees long term and sustainable growth both in terms of capital expansion and value creation for our shareholders.
The Company remains committed to the highest standards of hygiene, food safety and sustainability, and will continue to leverage its global expertise and 150 years of experience to provide safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.-PR
Copyright Business Recorder, 2021
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