FrieslandCampina lands into losses on account of hefty increase in financial cost

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MG News | February 07, 2020 at 10:56 AM GMT+05:00

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February 7, 2020 (MLN): FrieslandCampina Engro Pakistan Limited (FCEPL) has unveiled its financial performance for the year ended December 2019 wherein the company reported net losses of Rs 1.1 million against the profits of Rs 63,783 earned last year. This translated into loss per share which clocked in at Rs 1.25 per share.  

Sharp economic headwinds, particularly steep increases in commodity costs due to devaluation of Rupee and rising interest rates have put pressure on the overall company’s profitability. As a result, gross margins reduced from 16% to 13%.  

With regards to the company’s major expense heads, admin expenses surged by 30% YoY, while other expenses rose by 128% YoY.

During the year, the company also received tax incentives of Rs 144,490 which was down by 38% YoY, still, it failed to mark any significant improvement in reducing its losses as the company witnessed a considerable increase in its finance cost by 80%YoY.

 

Financial Results for the year ended December 31st 2019 (Rupees)

 

2019

2018

%change

Revenue from contracts with customers - net

38,857,336

32,439,451

20%

Cost of sales

-33,687,049

-27285392

23%

Gross profit

5,170,287

5,154,059

0%

Distribution and marketing expenses

-3,969,309

-4,205,762

-6%

Administrative expenses

-1,245,853

-957,071

30%

Other operating expenses

-246,874

-108,475

128%

Other income

412,968

622,269

-34%

Operating profit

121,219

505,020

-76%

Finance cost

-1,221,574

-675,340

81%

Loss before taxation

-1,100,355

-170,320

546%

Taxation

145,490

234,103

-38%

(Loss) / profit for the year

-954,865

63,783

 

(Loss) / earnings per share - basic and diluted

-1.25

0.08

 

 

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