FrieslandCampina Engro announces loss of PKR 145mn in 4Q2020

February 9, 2021

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Frieslandcampina Engro Pakistan Limited (Previously Engro Foods ltd) announced a loss of PKR145 million for 4QCY20 (Loss Per Share 0.19) as compared to loss of PKR 146million (Loss Per Share 0.19) in the same period last year. Cummulative profitability for year 2020 stood at PKR 177 million (Earnings Per Share :0.23) vs loss of PKR 955 million (Loss Per Share 1.25) in 2019.

During 2020, the company marked a 14% increase in Sales revenues while its cost of sales jumped by 13.40 % YoY, as a result, the gross profits of the company saw a growth of 22% YoY.

FCEPL’s earnings were supported by a decrease in expense heads, as administrative cost came down by 7.35% YoY from PKR 1.24 billion to PKR 1.15 billion. Moreover, distribution & marketing expenses and other operating charges fell by 0.48% and 28.21%, YoY, respectively.

Overall, the company has been able to reduce its losses in 2020 due to increasing in price for UHT milk by ~15%, increased sales of Packaged Milk Olpers amid an outbreak of COVID-19, lower finance cost, and the abolishment of custom duty on import of skim milk powder in Federal Budget.

However, company’s gross margins declined to 9.2% in 4QCY20 primarily because of lower sales contribution of Tarang

	Dec-20	Dec-19	% Change
Net Sales	44,155,023	38,567,019	14%
Cost of revenue	(38,202,175)	(33,687,049)	13%
Gross Profit	5,952,848	4,879,970	22%
Distribution and Marketing Expenses	(3,661,213)	(3,678,992)	0%
Administrative Expenses	(1,154,310)	(1,245,853)	-7%
Other Operating Expenses	(177,243)	(246,874)	-28%
Other Income	546,438	412,968	32%
Operating Profit	1,506,520	121,219	1143%
Finance Cost	(1,238,840)	(1,221,574)	1%
Profit/ (Loss) before Taxation	267,680	(1,100,355)	–
Taxation	(90,754)	145,490	-162%
Profit/ (Loss) for the year	176,926	(954,865)	–
Earnings/ (Loss) per Share	0.23	(1.25)	–