Despite the fact that Unilever Foods Pakistan (UPFL) finds itself aggressively competing with the main players in the fast moving consumer goods segment, it has managed to stay in good shape during 2015.
The Anglo-Dutch Food Company posted its 2015 result on PSX website on Tuesday; the result shows that the revenue grew by decent 10 percent year-on-year. The volumetric growth and better sales mix are the underlying reasons why the top line has increased. According to the company accounts, it has seen 7 percent year-on-year volumetric growth during CY15. The higher revenue and lower finance cost have helped the company clock in 5 percent year-on-year increase in its earnings at the end of calendar year.
UPFL fourth quarter has helped the company quite a bit in terms of its top line. The fourth quarter turnover beefed up by a healthy 15 percent. The cost of the revenue also increased year-on-year, but it has come down by 300 bps in terms of net sales. It is evident that lower fuel cost and commodity prices have helped Unilever Food during the year.
On the back of cost efficiency, better volume absorption and sales mix UPFL has seen improvement in its gross margin which has grown by 200 bps in CY15. Unilever Foods has not provided the break-up of its operating expenses in its result. However, it has mentioned that during the year the Company has stepped up its advertising and promotion expenses by 203 bps.
Going forward, the outlook of the company is quite positive similar to other FMCG companies in Pakistan. For Unilever Foods, its brands are its biggest strength but the competition is growing mainly in its tea segment where it is not only facing competition from local brands but also by illegal tea smuggling in the country.
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