April 26, 2024 (MLN): Nestle Pakistan Limited (PSX: NESTLE) experienced a drop of 10.49% YoY in its profits for the quarter ended March 31, 2024, earning a profit after tax of Rs5.07 billion [EPS: Rs111.75], compared to a profit of Rs5.66bn [EPS: Rs124.85] recorded in the same quarter last year (1QCY23).
Highlighting a significant development in terms of its profit and loss statement, the company has also informed that it has reclassified the general licensing fee (inclusive of related taxes) from the Cost of Goods Sold to Distribution and Selling Expenses for the purposes of comparison and improved presentation.
NESTLE has further ensured that this reclassification does not affect the company's financial results.
Going by the results, the company's top line increased by 9.7% YoY to Rs54.39bn as compared to Rs49.59bn in SPLY.
The growth in sales outweighed the 10.8% YoY rise in selling costs, resulting in a 7.8% YoY improvement in gross profit to Rs19.74 billion in the first quarter of 2024.
Accordingly, the gross margins improved to 36.3% as compared to 36.94% in 1QCY23.
On the expense side, the company observed a rise in Administrative Expenses by 0.3% YoY and other expenses by 62.8% YoY to clock in at Rs1.51bn and Rs762.12m respectively during the review period.
Similarly, the company's selling and distribution expenses increased by 43.2% YoY to Rs8.5bn.
The finance cost of the company also expanded by 24.3% YoY and stood at Rs762.37m as compared to Rs613.28m in SPLY, mainly due to higher interest rates.
NESTLE's other income surged by 3.11x YoY to stand at Rs272.42m in 1Q2024 as compared to Rs87.65m in SPLY.
However, the increasing burden of expenses, coupled with high finance costs, led to a drop in profitability for the company, despite higher sales and other income.
On the tax front, the company paid a higher tax worth Rs3.41bn against the Rs2.63bn paid in the corresponding period of last year, depicting an increase of 29.4% YoY.
| Financial Results for quarter ended March 31, 2024 (Rupees in '000) | |||
|---|---|---|---|
| Mar 24 | Mar 23 | % Change | |
| Sales | 54,394,903 | 49,591,628 | 9.69% |
| Cost of sales | (34,651,576) | (31,273,750) | 10.80% |
| Gross Profit/ (loss) | 19,743,327 | 18,317,878 | 7.78% |
| Administrative Expenses | (1,513,342) | (1,508,931) | 0.29% |
| Selling And Distribution Expenses | (8,501,509) | (5,936,994) | 43.20% |
| Other Income | 272,416 | 87,649 | 210.80% |
| Other Operating Expenses | (762,121) | (2,050,099) | -62.83% |
| Finance Cost | (762,372) | (613,283) | 24.31% |
| Profit/ (loss) before taxation | 8,476,399 | 8,296,220 | 2.17% |
| Taxation | (3,408,683) | (2,634,331) | 29.39% |
| Net profit/ (loss) for the period | 5,067,716 | 5,661,889 | -10.49% |
| Basic earnings/ (loss) per share | 111.75 | 124.85 | – |
Amount in thousand except for EPS
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Posted on: 2024-04-26T12:54:51+05:00
