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FrieslandCampina Engro achieves highest-ever topline growth

FrieslandCampina Engro achieves highest-ever topline growth

FrieslandCampina Engro achieves highest-ever topline growth

FrieslandCampina Engro achieves highest-ever topline growth

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KARACHI: The FrieslandCampina Engro Pakistan Limited (FCEPL) delivered another record year with the highest-ever topline and operating profits of Rs73.5 billion and Rs5.3 billion, respectively, the company announced in its financial results for the year ended December 31, 2022.

The topline grew 41 per cent over the last year driven by volume growth, mix improvement and expansion of the retail footprint, despite aggressive competition and distribution challenges.

The company witnessed gross profit growth of 37 per cent, while the gross margin declined by 50 basis points (bps) due to higher commodity prices, global geo-political environment, foreign exchange constraints, rupee depreciation and floods.

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

The profit-after-tax grew 37 per cent, despite higher interest rates and the super tax imposition.

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School milk programme

Keeping in view the company’s purpose of nourishing Pakistan, it collaborated with the University of Education and University of Veterinary and Animal Sciences to gauge the health benefits of daily milk consumption on children.

For this purpose, the School milk programme was conducted by providing milk to over 8,000 children in 89 primary schools in Attock and Sheikhupura.

The programme generated encouraging research-based evidence that highlights the need to develop a policy for providing milk in schools at the national level to improve the status of nutrition in Pakistan.

Dairy and beverages segment

The segment reported a revenue of Rs66.3 billion, reflecting a growth of 41 per cent versus last year.

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Olper’s led the growth in the segment by strengthening its market leadership position through brand and trade investments.

The Olper’s UHT milk, cream, dobala, flavoured milk and Tarang all posted a double-digit growth. The segment deployed various physical availability initiatives along with the capitalising on category captaincy in the modern trade channel.

Through targeted consumer promotions, investment in trade activations and the consumer engagement, FCEPL’s retail footprint expanded by over 4,500 outlets. The company accelerated its profitable growth by driving its value-added brands in the market.

Ice cream and frozen desserts segment

This segment reported a revenue of Rs7.18 billion, reflecting a growth of 37 per cent, compared with the last year. The business invested in the season-opening activities and capitalised on all the festivities through best-in-class service and expansion of the trade universe by inducting more assets in the market.

Future outlook

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The business environment remains challenging among the rising inflation, foreign exchange constraints, currency depreciation, higher finance cost and the imposition of super tax.

Moreover, the rising natural disasters due to climate change and dynamic consumer needs may affect the ability of the business to serve the consumers effectively. However, the company will continue to remain agile and drive efficiencies across the value chain to deliver growth.

The business will continue to invest in brand equity and expand its profit accretive portfolio to leverage margins.

Committed to nourishing Pakistan, the company will 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.

It will also continue to scale up its industry-leading dairy development programme, which is designed to ensure inclusive growth and increased profitability for the dairy farmers, including women farmers and milk collection agents.

Leveraging its global expertise and 150 years heritage, FrieslandCampina Pakistan remains committed to the highest standards of hygiene, food safety and sustainability and will continue to provide safe, affordable and nourishing dairy products to millions of Pakistanis, every day.

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