Sri Lanka NestlÃ© unit December quarter net up 37-pct
ECONOMYNEXT – Nestlé Lanka said net profits rose 37% to Rs1.18 billion in the December 2017 quarter from a year ago although annual profit fell as a severe drought and floods dampened consumer demand amid higher costs.
The Sri Lankan unit of Swiss food and beverage multinational said December 2017 quarter sales rose 16% to Rs9.98 billion. Quarterly earnings per share were Rs21.94. The stock was last traded Thursday at Rs1,850.
In the year to 31 December 2017, EPS was Rs67.64 with net profit down 17% to Rs3.6 billion while sales rose 3% to Rs37.6 billion from the previous year.
Severe drought, floods, sluggish market conditions and increased taxes impacted the annual results, Nestlé Lanka said in a statement.
“The FMCG market has been adversely impacted this year due to sluggish consumer demand and rising cost pressures,” said Shivani Hegde, Nestlé Lanka Managing Director.
Growth was further eroded by an increase in Value Added Tax, which coupled with unprecedented increase in coconut prices, had a negative impact on profit, the statement said.
“Enhanced cost saving measures and a focus on driving efficiencies across the value chain helped in partly mitigating these impacts.”
Nestlé Lanka said it has ongoing product renovations to reduce sugar, salt and fat, and increase micronutrients like iron, vitamin A and calcium in its products.
(COLOMBO, February 23, 2018)