FrieslandCampina Engro Pakistan Limited (FCEPL) on Tuesday announced its financial results for the year ending 31st Dec 2020.
“The business continued its strong growth trajectory recording a 9th consecutive quarter of robust topline growth. During the year, the company reported a revenue of Rs44.2 billion, registering a 14pc growth versus last year, despite Covid-19 related lockdowns and closure of retail and leisure outlets.
The overall cost environment remained challenging, with high increases in the commodity costs in the last 12 months due to record food inflation and devaluation of the Pakistani Rupee. In particular, the business has witnessed a sharp hike in the cost of milk, which is a key input for the company, in the last three months. However, the company has already taken several initiatives to drive savings and efficiencies to manage inflation and drive financial performance, whilst a few more initiatives have subsequently been executed in Q1FY21.
As a result, the company achieved an 80bps improvement in gross margins versus the FY2019. The company also continued to drive efficiencies in distribution and administrative expenses through multiple cost optimization initiatives.
Accordingly, FCEPL registered a profit after tax of Rs177 million versus a loss of Rs955 million in the same period last year.
Led by its core brands Olper’s and Tarang, the dairy and beverages segment registered a 17pc growth versus the same period last year, reporting a revenue of Rs40.5 billion. Both brands continue to win in the marketplace through strong brand and trade investments and have consolidated market share leadership in their respective categories. The business also continued expansion of its retail footprint by more than 11,000 outlets and explored newer channels and routes to market during the year.
The ice cream and frozen dessert segment was impacted by the closure of retail and leisure spots due to Covid-19, which coincided with the ice cream/summer season. While the segment reported a revenue of Rs3.6 billion versus Rs3.9 billion in the same period last year, the business continued to create excitement by introducing 7 innovations, investing in brand building through the “summer blockbuster” campaign, and expansion of its trade universe. This paid strong dividends when the lockdowns were eased, and the segment subsequently witnessed improvement in sales.