KARACHI: FrieslandCampina Engro Pakistan Limited posted a loss of Rs954 million for the year ended December 31, 2019 against a profit of Rs63.8 million in the corresponding period of the previous year.
The company reported a loss per share Rs1.25 in the period under review against earnings per share of Rs0.08 in the previous year.
"The company took a toll on its profits due to finance cost and higher administrative expense," said Arif Habib Commodities MD & CEO Ahsan Mehanti.
"The economic environment of the country is difficult that is also a big reason behind the company's loss."
He said that the high interest rate and inflation have contributed to the loss. The company earned revenue in billions but still made a loss. Topline of the company was Rs38.86 billion in 2019 against Rs32.4 billion in 2018.
The company took loans after acquisition which are expensive now as their cost is higher, said the analyst.
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Interest rate is 13.25%, while inflation was recorded at 14.6% in January 2019.
The company has increased its prices, which was why its revenue has increased not because of volumetric increase in sales, he said.
Finance cost of the company soared significantly to Rs1.2 billion in 2019 from Rs675 million in the previous year.
The company is relatively new and wanted to introduce more products, however, it paused new projects due to increased price of raw material, said the analyst.
The company's administrative expenses increased to Rs1.2 billion compared to Rs957 million.
Meanwhile, the company's operating profit declined from Rs505 million in 2018 to only Rs121 million in 2019.
Published in The Express Tribune, February 8th, 2020.
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