Frieslandcampina Engro Pakistan Limited (FCEPL) reported consolidated earnings per share of PKR 3.51 for CY25, compared to earnings per share of PKR 2.87 in CY24. Furthermore, in 1QCY26, the company reported earnings per share of PKR 2.41, compared to earnings per share of PKR 1.42 in the same period last year (SPLY). FCEPL delivered approximately PKR 2.5bn in cost savings through various efficiency initiatives, including a 3MW solar energy project at the Sahiwal plant and a 2.5% improvement in equipment efficiency.
The company successfully navigated a full year of the 18% GST impact, which had significantly pressured UHT volumes. In the UHT segment, FCEPL continues to holds 60% market share. Only around 6%–8% of Pakistan’s dairy market has transitioned to the packaged milk segment. Management believes this substantial untapped potential represents a key long term growth opportunity, with the total addressable market estimated at approximately EUR 15bn. Value added products, including ice cream and flavored milk, generally offer margins that are approximately 30% higher than the core UHT portfolio. FCEPL has demonstrated continuous margin improvement over the past five years.
While Q1 margins are typically higher due to seasonality, management’s long term objective remains sustainable margin expansion through cost optimization and increased contribution from value added products. Through the Pakistan Dairy Association, FCEPL is advocating for a level playing field between the taxed organized sector and the untaxed loose milk segment.
Management emphasized that addressing malnutrition, which costs nearly 3% of GDP, requires incentivizing the consumption of safe, packaged milk. The Nara Farm currently fulfills nearly 10% of the company’s total milk requirements, compared to 6–8% in previous years, while management also highlighted that record yields were achieve.
Beyond the 3MW solar plant at Sahiwal, management confirmed that plans are underway to implement solar energy projects at the Nara Farm and other facilities in the future.
Important Disclosures
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