Unilever Pakistan Records Profit of Rs. 1.82 Billion Over 3-Month Period

 

Unilever Pakistan's Profits Plunge 45.7% in Q1 2024

Karachi, Pakistan - Unilever Pakistan Foods Limited (PSX: UPFL) grappled with a significant decline in profitability during the first quarter of 2024. The company reported a net profit of Rs 1.82 billion, reflecting a staggering 45.74% drop compared to the same period last year. This translates to earnings per share (EPS) of Rs 285.87, down from Rs 526.89 in Q1 2023.

Despite the profit decline, the Board of Directors maintained its commitment to shareholder returns by declaring a first interim cash dividend of Rs 143 per ordinary share. The record date for this dividend is set for May 6, 2024.

Unilever Pakistan's struggles mirror the broader economic challenges facing the country. Revenue for the quarter dipped by 17.9% to Rs 8.76 billion. Analysts attribute this decline to soaring inflation, which has forced consumers to prioritize essential items over discretionary purchases like instant noodles, a core product category for UPFL.

The combined effect of falling sales and rising input costs significantly impacted the company's profitability. Gross profit witnessed a steeper decline of 30.6% to Rs 3.4 billion, indicating a 38.9% decrease in profit margin per product sold.

However, there was a silver lining. Unilever Pakistan saw a positive uptick in "other income," which includes income from investments and other non-core business activities. This segment registered a 26.7% growth to Rs 656.09 million compared to Rs 517.8 million in Q1 2023.

Looking ahead, the company's performance hinges on its ability to navigate the inflationary environment and adapt its product offerings to changing consumer preferences. While the short-term outlook remains cautious, Unilever Pakistan's commitment to shareholder value and its diversified revenue streams offer some grounds for optimism.