Rupee devaluation sour for FrieslandCampina

Engro Foods, FrieslandCampina's Pakistani subsidiary, generated considerably more turnover in the first quarter of this year than in the same period last year. Profits also increased significantly. Due to the devaluation of the Pakistani rupee, the situation expressed in euros is significantly less positive.

FrieslandCampina Engro Pakistan Limited, as the company is called in full, saw turnover increase by 62% to 22.642 million Pakistani rupees in the first three months of this year. Expressed in euros, this amounts to €73,5 million. Due to the continued devaluation of the rupee, turnover in euros only increased by 6,5%. The company attributes the sales growth to volume gains and a better product mix.

Despite inflation, Engro Foods managed to increase its margin. Net profit increased by almost 50% to 990 million rupees, although profit in relation to turnover fell slightly. This equates to €3,2 million at current exchange rates. Due to the rapidly devalued Pakistani currency, the profit in euros even takes a small step back. 

The rupee is one of the worst performing currencies in the world. The devaluation will probably also affect FrieslandCampina in the coming months. Reuters reported earlier this month that currency traders expect the rupee to depreciate further in the coming months.

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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