⚡ Flash Summary
FrieslandCampina Engro Pakistan Limited (FCEPL) reported a 2.8% YoY decrease in revenue for the nine months ended September 30, 2025, totaling PKR 80.232 billion compared to PKR 82.512 billion in the same period last year. Despite the revenue decline, the company improved its gross margins by 130 bps through cost rationalization and a better product mix, leading to a PKR 1 billion increase in operating profit. The Frozen Dessert segment saw a 15% value growth, while the Dairy-based products segment experienced a 5% decline due to the impact of sales tax on UHT milk. The company continues to engage with stakeholders to address the challenges posed by the 18% sales tax on packaged milk.
📌 Key Takeaways
- 📉 Revenue decreased by 2.8% YoY, from PKR 82.512 billion to PKR 80.232 billion.
- 📈 Gross margins improved by 130 bps due to cost rationalization and better product mix.
- ⬆️ Operating profit increased by PKR 1 billion compared to the same period last year.
- 🥛 Dairy-based products segment revenue declined by 5% to PKR 69.9 billion due to sales tax on UHT milk.
- 🍦 Frozen Desserts segment achieved a 15% value growth, generating PKR 10.4 billion in revenue.
- Campaign launched to strengthen brand purity credentials in the Dairy-based products segment.
- Focus on Olper’s Cream and Flavored milk delivered volume growth despite competition.
- Packaged milk category remains in decline post the imposition of sales tax.
- Company focusing on execution and partially gaining back volumes and growing market share.
- Company is engaging with stakeholders to provide a more equitable environment for the formal Dairy Industry.
- Earnings per share increased to Rs. 2.73 from Rs. 2.63
🎯 Investment Thesis
Given the revenue decline and regulatory challenges, but also the improved margins, a HOLD recommendation is appropriate. There is no provided information on the price target.
Disclaimer: AI-generated analysis. Not financial advice.