Profits of FrieslandCampina in Pakistan further decline

The Pakistani subsidiary of FrieslandCampina has performed variably in the first quarter of 2024. The revenue shows a significant increase due to volume growth, although the margins are under pressure for various reasons.

FrieslandCampina Engro Pakistan Limited, as the subsidiary is officially called, saw its revenue increase by 21% to 27.4 billion Pakistani rupees in the first three months of this year. Converted at current exchange rates, this amounts to approximately €91 million. The company attributes the revenue growth to volume growth, sometimes driven by price actions. The latter causes the profit margin to be under pressure.

In addition, the devaluation of the rupee and rising raw material and energy prices eat into the margin, while higher interest rates also affect the company. The bottom line shows a 32% decrease in profit to 665 million rupees. This amounts to over €2 million.

In line with 2023
The first quarter figures continue the trend from 2023. Back then, the company also saw an increase in sales and shrinking margins. The higher sales, however, strengthen FrieslandCampina's market position in the South Asian country.

Wouter Baan

Wouter Baan is the editor-in-chief of Farmerbusiness and a market specialist in dairy, pork, and meat at DCA Market Intelligence. He also tracks developments within the agribusiness sector and conducts interviews with CEOs and policymakers.

w.baan@farmerbusiness.com