Karachi: Unilever Pakistan Foods Limited experienced a 9.3% drop in sales for the six-month period ending June 30, 2024, as revealed in the directors' review presented today. The decline was primarily attributed to sustained inflationary pressures that have affected consumer purchasing power, influencing shifts from non-essential to essential commodities.
According to information available from the Pakistan Stock Exchange (PSX), the significant inflation over the past two years, driven by sharp increases in electricity tariffs and petroleum prices, has particularly impacted sales of non-essential items such as instant noodles. Despite these challenges, strategic price adjustments enabled the company to achieve a gross margin of 38.9%.
The financial highlights indicate a notable decline in the company’s performance with net sales registering at Rs 17.00 billion, down from Rs 18.74 billion in the previous year. Profit after taxation also fell to Rs 3.80 billion, a 26.7% decrease from Rs 5.19 billion, reflecting the dilution of gross margins and the maturity of investment tax credits. Correspondingly, Earnings per Share (EPS) dropped by 26.7% to Rs 597.33.
Looking ahead, the company anticipates a gradual recovery in demand for its non-discretionary products, supported by the expected revival of the International Monetary Fund (IMF) program and stabilization measures by the government. Despite the potential negative impacts of new budgetary measures aimed at increasing revenue generation, which may further affect consumer purchasing power, the management remains focused on leveraging brand potential to enhance shareholder value.