The company reported revenue of PKR14bn ($75m) in the first quarter, a rise of 20.7% versus last year. The growth was led by improvement in the portfolio mix, coupled with an increase in volumes of both, the dairy and beverages and the frozen desserts segments.
FCEPL said because of sharp increases in commodity costs due to continued inflation and the devaluation of the Pakistani Rupee, the business environment remained fraught with challenges. Consequently, the gross margins declined by 140bps.
However, the company said it continued to drive cost-efficiencies through multiple cost-saving initiatives, which resulted in FCEPL registering a post-tax profit of PKR664m ($3.6m) in Q1, an improvement of 10bps.
The Dairy and Beverages segment reported a revenue of PKR12.8bn ($69m), registering a 19.5% growth year-over-year. The segment’s growth was led by Olper’s as it continued to strengthen its position as the market leader with ongoing brand and trade investments. The segment witnessed expansion in the retail footprint and ecommerce channel during the quarter and will continue to explore new channels and route to markets.
To simultaneously diversify and strengthen its portfolio, the company launched Olper’s Cheese, which offers the nutritional equivalent of one glass of Olper’s milk (200g) in every slice of cheese (20g). Additional recent launches, including Olper’s flavored milk, Olper’s full cream milk powder, Olper’s pro-cal, Olper’s cream and Tarang Elaichi, continued to accumulate market share.
With revenue of PKR1.2bn ($6.5m), the frozen desserts segment reported a growth of 34.1% compared to the same period last year. The company launched the O’more Double Choco Chips Cone in 2022 at a price point of PKR 50 ($0.27), which it said was well-received in the market and is expected to grow.
FCEPL said the business environment remains fragile as rising inflation and currency devaluation continue to pressure profitability. However, initiatives are being taken to improve efficiencies and manage inflation.
FCEPL said it will continue to partner with the Pakistan Dairy Association (PDA) and the Government on initiatives to educate consumers on the potential health hazards of loose milk consumption and reinforce the positive characteristics of safe packaged milk.
“Our business will continue to invest in our people, processes, and projects to deliver unparalleled value and superlative quality, driven by innovation and technology. This will strengthen our brand equity and enable us to be the preferred choice for consumers’ dairy needs and expand our profit accretive portfolio to leverage margins,” a company statement said.
The company said it remains committed to the highest standards of hygiene, food safety and sustainability and providing safe, affordable, dairy products to millions of Pakistanis, every day.