KARACHI: Despite ongoing political instability, soaring energy and interest rates, and high inflation, foreign food item manufacturers have reported strong sales for the first half of 2024.
Although there were consumer boycotts of certain multinational soft drinks and milk products in response to the Gaza conflict, locally produced food items from joint ventures with foreign MNCs have largely escaped significant consumer backlash.
Exact sales volumes were not disclosed, as manufacturers generally do not report quantities in their financial statements. However, market insiders attribute the robust sales figures to higher prices.
Friesland Campina Engro Pakistan Limited (FCEPL) saw its revenue increase to Rs55 billion for the half-year ending June 30, 2024, up from Rs47 billion in the same period last year. Despite this, its profit-after-tax declined by six percent to Rs1.25 billion due to rising interest rates. The company’s frozen dessert segment saw revenue rise by 13 percent year-on-year to Rs6.16 billion, while its dairy-based segment grew by 18 percent to Rs48.87 billion.
The Finance Bill 2024 introduced an 18 percent sales tax on packaged milk, further straining consumer purchasing power and widening the gap between packaged and loose milk.
Nestle Pakistan Limited (NPL) reported a 6.2 percent increase in sales for the first half of the year, reaching Rs107.7 billion. This growth was driven by brand expansion and favorable portfolio mix but was offset by rising commodity and energy prices. As a result, NPL’s net profit decreased by 8.34 percent to Rs10 billion. The company is assessing the impact of new taxes and high input costs on its future performance.
Unilever Pakistan Foods Limited (UPFL) experienced a 9.3 percent decline in net sales to Rs17 billion and a 26.7 percent drop in profit to Rs3.8 billion. The company attributed the decline to reduced consumer spending on non-essential items like instant noodles due to high inflation. However, UPFL expects a gradual recovery in demand as macroeconomic indicators stabilize.
Colgate Palmolive Pakistan Limited reported a net turnover of Rs113 billion, down from Rs119.6 billion in the previous fiscal year, but saw its profit-after-tax rise to Rs17 billion from Rs10.4 billion.
Ismail Industries Limited achieved impressive sales of Rs131.3 billion for the fiscal year ending June 30, up from Rs100.6 billion the previous year, though its profit decreased to Rs4.9 billion from Rs5.89 billion.
Fauji Foods Limited posted a profit after tax of Rs337 million in the first half of the year, reversing a loss of Rs147 million from the same period last year. Its sales grew by 14.6 percent to Rs11 billion from Rs9.9 billion.
