Nestlé Pakistan Revenue Falls in H1 2025 Due to Tax Burden

Nestlé Pakistan has reported a 7.4% decline in revenue for the first half of 2025, with net sales dropping to PKR 50.4 billion. The decrease is primarily driven by weakened consumer demand due to the new 18% sales tax implemented through the Finance Act 2024‑25, alongside a heavier tax load on the salaried class, which makes up a significant portion of the company's customer base.

Despite the fall in sales, Nestlé Pakistan managed to strengthen its gross and operating profit margins, thanks to a better product mix and enhanced operational efficiencies. These internal improvements helped soften the blow from reduced sales and mounting operational costs.

The company’s profit after tax declined slightly by 1.36%, reaching PKR 4.99 billion, down from PKR 5.07 billion during the same period last year. While revenues dipped, cost control strategies and process optimizations kept the bottom line relatively stable.

For the entire year 2024, Nestlé Pakistan recorded sales of PKR 193.2 billion, reflecting a 3.7% year-on-year decline. Its net profit dropped by over 10%, down to PKR 14.81 billion, as rising distribution costs, administrative expenses, and brand marketing investments weighed on the overall profitability.

Management expressed a cautious outlook for the remainder of 2025, highlighting continued pressure from inflation, new taxation, and shrinking household budgets. Middle-income consumers, a key demographic for Nestlé, are expected to remain price-sensitive, leading to further pressure on discretionary purchases like packaged beverages, snacks, and dairy products.

Nevertheless, Nestlé reaffirmed its focus on cost-efficiency, value chain discipline, and customer-focused innovation to maintain brand strength and protect profitability in a challenging economic environment.
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