Foreign food giants post strong sales despite war
KARACHI: Although foreign food giants operating in Pakistan maintained a cautious outlook for the current year in view of the ongoing US-Iran war since Feb 28, their sales during the first six months of 2026 remained relatively strong despite a decline in profit after tax (PAT).
In their financial statements, the companies appeared concerned over shipment delays and fuel prices, which may continue to keep input costs under pressure.
Net sales of Nestle Pakistan Limited (NPL) for the six-month period ending June 30, amounted to Rs107 billion, up 5.7 per cent year-on-year (YoY). PAT, however, plunged 4.3pc to Rs9.9bn from Rs10.4bn during the same period.
Despite sharp increases in fuel and energy prices driven by the US-Iran war, the company successfully sustained business momentum through increased investment behind its brands, consumer-centric innovations and renovations (I&R), focused marketplace execution, strengthened route-to-market for exports and disciplined pricing, where necessary.
Shipment delays, freight and fuel costs weigh on sector
As per its January-June 2026 financial statements, the company’s focused investment in green energy initiatives, especially in solar and biomass, helped partially offset energy cost headwinds while reducing carbon emissions.
An improved topline, disciplined overhead management and continued focus on value-chain optimisation initiatives resulted in a 5.7pc improvement in gross profit compared with the same period of the previous year.
However, the improvement in gross profit narrowed to 2.8pc at the operating profit level, mainly due to increased investment behind brands and higher distribution costs driven by fuel prices.
Net profit after tax was negatively impacted by a higher incidence of taxation. Keeping in view the geopolitical situation, Nestle continued its localisation journey and strategically secured critical inventories, reducing foreign exchange exposure, strengthening supply-chain resilience and ensuring business continuity.
Amid ongoing geopolitical instability, continued volatility in energy and other input costs, and elevated inflation driven by fuel prices, Nestle maintains a cautious outlook for the full year 2026.
While inflationary pressures may continue to influence consumer spending and operating costs, the company said it was well positioned to navigate these challenges by ensuring appropriate investment behind brands to strengthen its market leadership position in key product categories, focusing on achieving operational excellence, developing future-ready, high-performing teams and advancing its sustainability agenda to serve as a force for good.
FrieslandCampina Engro Pakistan Limited (FCEPL) achieved revenue growth of 12.1pc during the first half of 2026, reaching Rs60bn compared with Rs52.5bn during the same period last year. The increase was attributed to a favourable portfolio mix, emphasis on in-market execution, selective brand investment and route-to-market fundamentals.
Alongside topline growth, ongoing efficiency initiatives across sourcing, manufacturing and distribution translated into a 350-basis-point expansion in gross margin and 54pc growth in operating profit compared with the same period last year.
The packaged milk market continues to operate below its pre-tax levels, driven by the 18pc sales tax imposed on UHT milk in July 2024. The uneven playing field vis-à-vis loose milk, which remains outside the tax net, continues to suppress volumes in the formal dairy sector.
The regional conflict continued to create challenges for the operating environment during the first half of 2026. Shipment delays and elevated freight costs weighed on the value chain, while multiple revisions in fuel prices during the period added further volatility to input costs, FCEPL said.
On the domestic front, inflation trended higher during the period, prompting an increase in the policy rate as well. Collectively, these dynamics continued to have a bearing on category affordability and demand.
Fauji Foods Limited (FFL) recorded its highest-ever revenue of Rs12.77bn during the first half of 2026, up 12.6pc from the same period of 2025. However, PAT fell to Rs560m from Rs734m during the same period last year.
In its six-month report, the company said the decline in PAT was expected to recover as the planned interventions took effect during the remainder of the year.
Published in Dawn, August 23rd, 2026
