FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for the year ended December 31, 2025.
The Company pursued disciplined cost management and efficiency initiatives across the value chain. This included optimization of procurement, manufacturing, logistics and overheads, while maintaining quality, safety, and service standards. The combined impact of improved commercial execution and cost optimization resulted in an expansion in gross margin of 70 basis points and growth in operating profit of 16% vs 2024.
The uneven playing field for packaged UHT milk created by the implementation of the sales tax in 2024 remains a big challenge for the dairy sector. Despite these external challenges, the Company maintained a strong focus on its commercial agenda by continuing to invest behind its brands and delivering customer-centric offerings. These actions led to an increase in market share and improvement in volume mix.
The consumption of loose milk, remains outside tax net, the documented economy, and food safety frameworks. This taxation is misaligned with the government’s stated objectives of improving access to safe and nutritious food, strengthening documented supply chains, and supporting sustainable livelihoods for dairy farmers. Furthermore, the prevailing tax regime eliminates the ability of organized dairy companies to invest in category development, dairy development programs and long-term initiatives aimed at improving farmer livelihoods and productivity across the value chain.
Financial Performance Overview:
The financial performance of the company for the year ended December 31, 2025, is summarized below:
| Full Year ended Dec 31, 2025 | Variation | ||
| (Rs. in million) | 2025 | 2024 | |
| Net Sales | 104,452 | 107,051 | -2.4% |
| Operating Profit | 7,936 | 6,835 | 16% |
| % of sales | 7.6% | 6.4% | 120 bps |
| Profit / (Loss) after tax | 2,691 | 2,203 | 22% |
| % of sales | 2.6% | 2.1% | 50 bps |
| Earnings / (Loss) per share (Rs.) | 3.51 | 2.87 | |
Future Outlook
Whilst the implementation of the 18% sales tax on packaged milk continues to be a challenge for the industry, FrieslandCampina Engro Pakistan remains resilient and will continue to build on the strong foundations of its business by strengthening brands and reinforcing consumer trust in the safety and nutritional value of packaged dairy. Since there have been no major investments behind category development and broader dairy sector initiatives, limiting the pace at which the formal sector can expand its positive impact, a sustained focus on improving affordability, cost efficiency across supply chain and mix management will remain central to how the company operates.
The company will continue to engage with government stakeholders and relevant authorities to advocate for a more balanced and equitable taxation regime for packaged dairy, aligned with practices adopted in many other parts of the world. Such an approach would support food safety, formalization of the economy, and sustainable growth of the dairy sector.
At FCEPL, we remain committed to the highest standards of hygiene, food safety and sustainability, while providing safe, affordable, and nourishing dairy products to millions of Pakistanis, every day.
