FrieslandCampina Engro Pakistan profit up 234pc in H1CY26, board recommends no dividend

KARACHI: FrieslandCampina (Formerly Engro Foods Limited) has posted a PAT of Rs4.398 billion for the H1CY2026, compared to Rs1.317 billion in the corresponding period last year, showing an increase of 234 percent, according to unaudited financial figures endorsed by the board of director. The board announces a nil cash dividend, no bonus or right share for shareholders for the corresponding period.

EPS for the half year worked out to Rs5.74, against Rs1.72 in the corresponding period of 2025.

Within the half, the second quarter (April-June 2026) contributed Rs2.55 billion of the profit, up sharply from Rs232 million in the same quarter last year and marking the steepest gain of the two quarters combined.

The revenue generated from customers' contract amounted to Rs58.86 billion during the half-year period compared to Rs52.49 billion reported in the first half of CY25, recording an increase of 12%, significantly slower than that of the profit.

Gross profits recorded an increase of 33% to Rs13.03 billion as compared to Rs9.78 billion for the same period last year, thus increasing the gross margin by 3.5%. It is important to note that the reason behind the increased gross margin was not mentioned in the filing of the company.

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Operating profit for the half year stood at Rs7.29 billion, 54 percent higher than Rs4.73 billion in H1CY25. Finance costs, meanwhile, came down to Rs349.7 million from Rs801.5 million over the same period.

On the balance sheet side, cash and bank balances stood lower at Rs1.13 billion as of June 30, 2026, compared with Rs1.21 billion at the close of CY25. According to the condensed interim cash flow statement, cash and cash equivalents at period-end were negative Rs501.325 million, against a positive Rs331.344 million a year earlier.

Short-term finances were recorded at Rs1.54 billion, up from Rs746 million. Stock-in-trade climbed 51 percent to Rs14.96 billion from Rs9.89 billion, while total assets were up at Rs42.24 billion compared with Rs37.51 billion as of December 31, 2025. Trade and other payables remained largely unchanged at Rs15.53 billion.

During the half year, the company paid out Rs1.31 billion in dividends, relating to the Rs3.50 per share final dividend declared for CY25. No additional distribution has been announced alongside the H1CY26 results, even though unappropriated profit on the balance sheet has gone up to Rs10.40 billion from Rs8.69 billion.

Taken together, the results point to a sharp rise in profitability set against higher short-term borrowing, a 51 percent build-up in inventory and a negative cash and cash equivalents position at period-end. The filing does not explain the board's decision to withhold a fresh dividend. Whether the improved margins and profitability hold up alongside the company's cash position will likely become clearer in the coming quarters.