Hifsa Raja

The revenue of FrieslandCampina Engro Pakistan Limited (FCEPL) – a dairy products maker – jumped to Rs73 million in the calendar year 2022, which was the highest during the last six years. As such, the company’s gross profit increased to Rs12 million in CY22 from Rs8 million in CY21. It was also the highest gross profit in the last six years. The profit-before-taxation during CY22 increased to Rs3 million from Rs2 million in CY21. The after-tax profit also increased to Rs2.4 million in CY22 from Rs1.8 million in CY21, reports WealthPK.

The company earned the highest revenue in the third quarter of 2022, which stood at Rs22 million. However, the company’s net profit margin in the fourth quarter was the highest at 3.36% due to operational efficiency.

Industry Comparison

The companies that have been considered the competitors of FrieslandCampina Engro Pakistan are National Foods Limited, Rafhan Maize Products Co. Limited, Unilever Pakistan Foods Limited, and Ismail Industries Limited.

FrieslandCampina Engro Pakistan Limited's price earnings ratio (PE) stood at 19.2x, which showed that the company is overvalued as it had a market value of Rs47.5 billion, which was quite low compared to most of its competitors. Rafhan and Unilever had the much higher capitalisation of Rs78.5 billion and Rs116 billion, respectively.

Profitability

The company's profitability is nevertheless under pressure from rising inflation, currency depreciation, and restrictive monetary policies. Also, the implementation of super tax will have an effect on the formal sector. The company will also keep investing in brand equity to maintain its position as the go-to source for consumers' dairy needs and will broaden its portfolio of profitable investments to increase profits.

Company profile

FrieslandCampina Engro Pakistan Limited is a publicly listed company incorporated under the Companies Ordinance, 1984 (now the Companies Act. 2017). The company is a subsidiary of FrieslandCampina Pakistan Holdings B.V. (the holding company), which is a subsidiary of Zuivelcoöperatie FrieslandCampina UA (the ultimate parent company).

The principal activity of the company is to manufacture, process and sell dairy-based products and frozen desserts. The company also owns and operates a dairy farm. Dairy farmers are the backbone of the company’s supply chain.

Credit: Independent News Pakistan-WealthPk