FrieslandCampina Engro Pakistan : FCEPL | Frieslandcampina Engro Pakistan Limited Transmission of Quarterly Report for the period ended 31-03-2024

First Quarter 2024

Contents

Company information	3
directors' report	4
condensed interim statement of financial position	7
condensed interim statement of profit or loss	8
condensed interim statement of comprehensive income	9
condensed interim statement of changes in equity	10
condensed interim statement of cash flows	11
notes to the condensed interim financial statements	12
directors' report (Urdu version)	19

COMPANY

INFORMATION

Board of Directors	MCB Bank Limited
Abdul Samad Dawood (Chairman)	National Bank of Pakistan
Samba Bank Limited
Kashan Hasan (CEO)	Standard Chartered Bank Pakistan Limited
Ali Ahmed Khan	Summit Bank Limited
Abrar Hasan	United Bank Limited
Robert ter Borg	The Bank of Punjab
Petra Attje Zinkweg
Roeland Francois Van Neerbos	Shariah Compliant
Zouhair Abdul Khaliq
	Meezan Bank Limited
Chief Financial Officer
Auditors
Imran Husain
	A.F. Ferguson & Company
Company Secretary	Chartered Accountants

Muhammad Hassan Azwar

Members of the Audit Committee

Abrar Hasan (Chairman)

Robert ter Borg

Zouhair Abdul Khaliq

Secretary of the Committee is

Maria Umar Memon,

GM Internal Audit Department

Banks

Conventional

Allied Bank Limited

Askari Bank Limited

Bank Al-Falah Limited

Bank Al-Habib Limited

Citibank N.A.

Faysal Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited

State Life Building No. 1-C

I.I. Chundrigar Road.

Karachi - 74000, Pakistan.

Tel: [phone]

Share Registrar

M/s. FAMCO Share Registration Services (Private) Limited

8-F, Next to Hotel Faran, Block-6, PECHS, Shahrah-e-Faisal Karachi - Pakistan

Tel: [phone]

Fax: [phone]

Registered Office

5th Floor, The Harbor Front Building HC-3, Marine Drive, Block - 4, Clifton Karachi - 75600, Pakistan.

Tel: [phone] (9 lines)

Fax: [phone]

E-mail: [e-mail]

Website: www.frieslandcampina.com.pk

DIRECTORS' REPORT

The Directors of FrieslandCampina Engro Pakistan Limited (a majority-owned subsidiary of FrieslandCampina Pakistan Holdings B.V.) (the "Company") are pleased to submit the report along with the condensed financial information of the Company for the first quarter ended 31st March 2024.

BUSINESS PERFORMANCE OVERVIEW

The company delivered strong topline growth of 21% (PKR 27.5 billion compared to PKR 22.7 billion in the same period last year) despite the challenging operating environment and economic slowdown. This increase was fueled by volume growth and relevant consumer offerings.

The Company witnessed gross profit growth of 1%, while the gross margin declined by 320 bps due to currency devaluation and inflationary pressure on commodities and energy prices.

Profit after tax (as percentage of sales) declined by 200 bps over LY (Rs. 0.67 billion vs. Rs. 0.99 billion in the same period last year) due to an increase in interest rates.

DAIRY-BASED PRODUCTS SEGMENT

The segment reported revenue of Rs. 26.1 billion, reflecting a growth of 23% compared to the same period last year. The growth was led by our flagship brand Olpers through consistent brand building and trade activities.

Olper's continued to expand reach of its 1½ Pao Bachat Pack Campaign through TV and Digital channels. The Olper's 1½ Pao Bachat Pack, an ideal size for a single breakfast occasion, provides the right milk quantity needed for a family's daily breakfast needs.

Our Value-added brands like Olper's Cream, Olper's Cheese, Dobala and Tarka have continued to gain volume despite competition from established players.

FROZEN DESSERTS SEGMENT

The segment reported a revenue of Rs. 1.36 billion vs Rs. 1.44 billion period last year. The recent challenging times and a delayed summer onset, coupled with an unexpected rainy season across the country, impacted the expected growth. However, the Company anticipates a quick recovery in Q2 as the season fully commences.

FINANCIAL PERFORMANCE

The financial performance of the company for the three months ended March 31, 2024, is summarized below:

(Rs. in million)

Net Sales

Operating Profit

% of sales

Profit / (Loss) after tax

Three months ended
		Variation
2024	2023
27,464	22,651	21%
1,971	1,982	-1%
7.18%	8.75%	-157 bps
665	990

% of sales	2.42%	4.37%	-195 bps
Earnings / (Loss) per share (Rs.)	0.87	1.29

FUTURE OUTLOOK

FCEPL maintains its dedication to delivering strong business results for its shareholders, despite external challenges like inflation, currency devaluation and elevated interest rates. The company's agile business model enables the management to maintain growth through operational efficiency and adapting to changing consumer demands. In the future, FCEPL plans to continue investing in enhancing brand value and broadening its portfolio to improve profit margins.

Leveraging its global expertise and 150 years heritage, FCEPL remains committed to the highest standards to hygiene, food safety and sustainability and providing safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.

___________________

Abdul Samad Dawood	Syed Kashan Hasan
Chairman	Chief Executive Officer

Karachi: April 26, 2024

FRIESLANDCAMPINA ENGRO PAKISTAN LIMITED

CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTER ENDED MARCH 31, 2024

FRIESLANDCAMPINA ENGRO PAKISTAN LIMITED

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UNAUDITED) AS AT MARCH 31, 2024

(Amounts in thousand)

Note

ASSETS

Non-Current Assets

Unaudited	Audited
March 31,	December 31,
2024	2023
-------------------	Rupees -------------------

Property, plant and equipment	4
Biological assets
Intangible assets
Right-of-use assets
Deferred tax asset - net
Long term advances and deposits
Current Assets
Stores, spares and loose tools	5
Stock-in-trade	6
Trade debts
Advances, deposits and prepayments
Accrued mark-up / interest
Other receivables
Sales tax recoverable
Taxes recoverable
Short term investments
Cash and bank balances
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity
Share capital
Share premium
Employee share option compensation reserve
Remeasurement of post employment benefits - Remeasurement loss
Unappropriated profit
Non-Current Liabilities
Long term:
- finances
- lease liability against right-of-use assets
Current Liabilities
Current portion of long term:
- finances
- lease liability against right-of-use assets
Trade and other payables
Contract liabilities
Unclaimed dividend
Accrued interest / mark-up on:
- long term finances
- short term finances
Supplier financing - unfunded
Short term finances	7
Contingencies and Commitments	8

11,625,387

3,075,289

8,773

918,936

336,279

265,824

16,230,488

1,276,269

16,324,523

3,518,839

566,710

7,868

756,870

6,979,559

1,690,668

-

710,734

31,832,040

48,062,528

7,665,961

865,354

-

(296,594)

6,606,072

14,840,793

-

498,264

498,264

500,000

415,729

14,743,887

230,218

6,774

18,099

886,344

13,624,809

2,297,611

32,723,471

11,393,773

3,005,743

13,362

1,020,192

194,313

253,217

15,880,600

1,137,210

10,182,994

1,888,698

394,901

7,868

701,409

6,527,295

2,087,349

1,000,000

2,078,478

26,006,202

41,886,802

7,665,961

865,354

-

(296,593)

5,941,298

14,176,020

250,000

583,851

833,851

500,000

423,514

12,255,637

1,427,299

6,774

27,839

739,931

11,374,678

121,259

26,876,931

TOTAL EQUITY AND LIABILITIES

48,062,52841,886,802

The annexed notes 1 to 18 form an integral part of these condensed interim financial statements.

Chairman

Chief Executive Officer

Chief Financial Officer

FRIESLANDCAMPINA ENGRO PAKISTAN LIMITED

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UNAUDITED) FOR THE QUARTER ENDED MARCH 31, 2024

(Amounts in thousand except for earnings per share)

	Note	Quarter ended March 31,
		2024	2023
		--------------------- Rupees ---------------------
Revenue from contracts with customers - net		27,463,601	22,650,926
Cost of sales		(23,057,659)	(18,293,886)
Gross profit		4,405,942	4,357,040
Distribution and marketing expenses		(2,167,800)	(1,956,334)
Administrative expenses		(427,634)	(429,409)
Other operating expenses		(104,405)	(265,298)
Other income		264,568	276,192
Operating profit		1,970,671	1,982,191
Finance cost		(864,996)	(490,557)
Profit before taxation		1,105,675	1,491,634
Taxation		(440,902)	(501,271)
Profit for the period		664,773	990,363
Earnings per share - basic and diluted	9	0.87	1.29

The annexed notes 1 to 18 form an integral part of these condensed interim financial statements.

Chairman

Chief Executive Officer

Chief Financial Officer

FRIESLANDCAMPINA ENGRO PAKISTAN LIMITED

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE QUARTER ENDED MARCH 31, 2024

(Amounts in thousand)

Quarter ended

	March 31,
	2024			2023
	------------------ Rupees ------------------
Profit for the period	664,773			990,363
Other comprehensive income	-			-
Total comprehensive income
for the period	664,773			990,363

The annexed notes 1 to 18 form an integral part of these condensed interim financial statements.

Chairman

Chief Executive Officer

Chief Financial Officer

FRIESLANDCAMPINA ENGRO PAKISTAN LIMITED

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

FOR THE QUARTER ENDED MARCH 31, 2024

(Amounts in thousand)

			RESERVES
Share		CAPITAL		REVENUE		Total
capital	Share	Employee		Remeasurement Unappropriated
	premium	share option		of post	profit
		compensation		employment
		reserve		benefits

------------------------------------------------------------------ Rupees ------------------------------------------------------------------

Balance as at January 1, 2023 (Audited)

Profit for the period

Other comprehensive income for the period Total comprehensive income for the period

Balance as at March 31, 2023 (Unaudited)

7,665,961

-

-

-

7,665,961

865,354

-

-

-

865,354

1,267

-

-

-

1,267

(274,156)

-

-

-

(274,156)

4,431,245

990,363

-

990,363

5,421,608

12,689,671

990,363

-

990,363

13,680,034

Balance as at January 1, 2024 (Audited)	7,665,961	865,354	-	(296,594)	5,941,299	14,176,020
Profit for the period	-		-		-			-		664,773	664,773
Other comprehensive income for the period	-		-		-			-		-	-
Total comprehensive income for the period	-	-	-	-	664,773	664,773
Balance as at March 31, 2024 (Unaudited)	7,665,961	865,354	-	(296,594)	6,606,072	14,840,793
	-		-		-		-		0.00	0.00

The annexed notes 1 to 18 form an integral part of these condensed interim financial statements.

Chairman

Chief Executive Officer

Chief Financial Officer