FrieslandCampina Engro Pakistan Limited (FCEPL) posted a strong improvement in profitability for the quarter ended March 31, 2026, with its bottom line rising by around 71% year-on-year.

According to the company’s unaudited financial results, FCEPL recorded a profit after tax of Rs1.851 billion during the quarter, compared with Rs1.085 billion in the same period last year. Earnings per share also increased to Rs2.41, from Rs1.42 a year earlier.

Revenue and gross profit improve

The company’s net revenue increased to Rs28.722 billion, up from Rs26.016 billion in the first quarter of 2025. This represents growth of approximately 10.4%.

The increase in revenue was accompanied by a stronger improvement in gross profitability. Gross profit rose to Rs6.034 billion, compared with Rs4.748 billion a year earlier. The gross profit margin therefore improved significantly during the quarter.

Operating profit also strengthened, reaching Rs3.177 billion, compared with Rs2.222 billion in the corresponding quarter of 2025.

Lower finance costs support bottom line

One of the notable improvements came from finance costs. FCEPL’s finance costs declined sharply to Rs143.7 million, compared with Rs404.9 million in the same period last year.

As a result, profit before tax climbed to Rs3.033 billion, up from Rs1.817 billion. After accounting for taxation of Rs1.183 billion, the company reported a quarterly profit of Rs1.851 billion.

Balance sheet expands

FCEPL’s total assets stood at Rs44.944 billion as of March 31, 2026, compared with Rs37.511 billion at the end of December 2025.

Current assets increased substantially to Rs25.445 billion from Rs18.463 billion. Stock-in-trade rose to Rs15.691 billion, while cash and bank balances increased to Rs2.072 billion from Rs1.205 billion at the end of 2025.

Equity also improved, reaching Rs18.817 billion, compared with Rs16.966 billion at December 31, 2025, primarily reflecting the quarter’s profit.

Cash flow remains a key area to watch

Despite the strong earnings performance, the company reported negative operating cash flow during the quarter. Net cash utilized in operating activities amounted to Rs2.159 billion, compared with Rs637.5 million in the same period of 2025.

The company also invested Rs266.7 million in property, plant and equipment during the quarter. Overall, cash and cash equivalents decreased by Rs2.435 billion during the period.

No dividend announced

The company’s board, which met on April 24, 2026, approved the unaudited financial results for the quarter. It recommended no final cash dividend and no bonus or right shares in connection with the reported period.

Overall, FrieslandCampina Engro Pakistan delivered a robust start to 2026, supported by higher revenue, improved gross profitability and significantly lower finance costs. While the earnings growth is encouraging, the negative operating cash flow and higher short-term financing requirements remain areas investors may watch closely.