Unilever Pakistan Reports 15% Sales Growth, Profit Eases to Rs3.09bn Amid Higher Costs

August 20, 2025 – 05:03 PM GMT+05:00

Unilever Pakistan Foods Limited (PSX: UPFL) announced its financial results for the half-year ended June 30, 2025, posting a profit after tax of Rs3.09 billion (EPS: Rs484.86). This marks an 18.8% decline compared to Rs3.9bn (EPS: Rs597.33) in the same period last year, primarily due to higher taxation and rising finance costs.

The company declared a cash dividend of Rs444 per share (4440%) on ordinary shares of Rs10 each, reflecting its continued commitment to shareholder returns despite margin pressures.

Revenue and Cost Performance

Sales surged 15.2% year-on-year to Rs19.59bn in 1HFY25 from Rs17bn in 1HFY24. However, the cost of sales outpaced revenue, increasing by 16.2% to Rs12.06bn, which compressed margins slightly.

Gross profit still posted healthy growth, climbing 13.8% to Rs7.53bn versus Rs6.62bn in the prior year.

Operating and Non-Operating Impact

Operating expenses, including distribution and administration, inched up by a modest 2.7% to Rs2.91bn. On the flip side, other income plunged 61%, dropping to Rs616.8m compared to Rs1.58bn last year, further weighing on bottom-line performance.

As a result, profit from operations eased by 2.4% to Rs5.24bn, down from Rs5.37bn in 1HFY24.

Rising Finance Costs and Taxes

Finance costs jumped sharply to Rs65m, more than 10 times higher than the Rs5.5m recorded last year, mainly due to elevated borrowing costs.

Pre-tax profit slipped to Rs5.09bn, down 3.7% from Rs5.29bn previously. Meanwhile, tax expenses surged 35.2% to Rs2bn versus Rs1.48bn a year ago, dragging down net profitability.

Despite double-digit sales growth, UPFL’s earnings fell on the back of higher input costs, reduced other income, soaring finance charges, and heavier taxation.