Nestle Pakistan sees 14.75% deterioration in quarterly profits

April 30, 2020 (MLN): The 1QFY20 seemed challenging for the Nestle Pakistan Limited due to slowdown in economic activity, as its net profits after tax for the quarter deteriorated by 15% YoY to Rs 1.94 billion compared to Rs 2.27 billion booked in the same quarter last year.

This has reflected in the company’s earnings per share which also declined by the same percentage from Rs50.15 last year to Rs 42.76.

The decline in profitability was attributable to flat revenues and higher financial charges during the quarter. The net revenues of the company depicted a slight growth of 2.5% YoY due to lower demand while financial charges jumped significantly by 41% YoY to Rs 1 billion.

Furthermore, other expenses also surged by 68% YoY which put a check on the company’s profitability.

However, the company observed a 14% reduction in tax payments, the overall impact on ultimate profits of the company was not adequate to pull up the profits of the company by a significant margin.

Consolidated Profit and Loss Account for the Quarter ended March 31, 2020 (‘000 Rupees)
Mar-20Mar-19% Change
Sales – net 29,883,365 29,135,8782.57%
Cost of goods sold (21,043,197) (20,366,370)3.32%
Gross Profits 8,840,168 8,769,5080.81%
Distribution and selling expenses (3,570,348) (3,790,883)-5.82%
Administration expenses (1,216,254) (951,537)27.82%
Operating profits 4,053,566 4,027,0880.66%
Finance cost (1,026,206) (727,333)41.09%
Other expenses (400,247) (237,708)68.38%
Other income 62,388 85,718-27.22%
Profit before taxation 2,689,501 3,147,765-14.56%
Taxation (750,559) (873,427)-14.07%
Profit after taxation 1,938,942 2,274,338-14.75%
Earnings per share – Basic and Diluted (Rupees) 42.76 50.15-14.74%

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Posted on: 2020-04-30T13:13:00+05:00