Unilever Pakistan Foods Limited Reports Financial Strain Amid Inflation, Announces Dividend

Karachi: At a meeting held on August 16, 2024, the Board of Directors of Unilever Pakistan Foods Limited approved the un-audited condensed interim financial information for the first half of the year, revealing a 9.3% decline in sales due to severe inflationary pressures. According to information available from the Pakistan Stock Exchange (PSX), this financial strain comes amidst a backdrop of escalating costs and changing consumer behavior toward essential commodities. The company announced a significant interim dividend, reflecting confidence in future recovery.

In the detailed financial breakdown, for the six months ending June 30, 2024, the company recorded total sales of Rs. 17,001.16 million, a decrease from last year’s Rs. 18,737.72 million, with the cost of sales also slightly down from Rs. 10,477.46 million to Rs. 10,381.35 million. Despite these challenging conditions, strategic pricing adjustments allowed the company to achieve a gross margin of 38.9%.

Earnings per share fell by 26.7%, registering at Rs. 597.33 compared to Rs. 814.67 the previous year. The profit before tax stood at Rs. 5,286.27 million, down from Rs. 5,549.41 million in 2023, highlighting the impact of reduced consumer spending on non-essential items like instant noodles.

The Board also declared a second interim cash dividend of Rs. 623 per share, scheduled for payment on August 26, 2024, to shareholders registered by August 25. Share transfer books will be closed from August 27 through August 29 to finalize this dividend payment.

Looking ahead, the company remains optimistic about a gradual recovery, bolstered by expected macroeconomic stabilization and a softening of inflation, although budgetary measures to increase revenue might further affect consumer purchasing power. The management focuses on leveraging brand potential to enhance shareholder value amidst these recovering economic conditions.

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