Nestle India net up 6.62% in July-Sept qtr

Huge jump in sales from exports to affiliates push profit to Rs 285 cr

Nestle India, on Wednesday, reported a 6.62 per cent increase in net profit during July-September quarter at Rs 285 crore backed by huge jump in sales from exports to its affiliates. The Indian entity of the Switzerland-based company that makes of Nescafe coffee and DiGiorno pizza had reported Rs 267.3 crore of net profit during the corresponding quarter previous fiscal year.

Nestle India’s net sales grew 11 per cent growth to Rs 2,348.3 crore during the quarter. While sales from domestic operations rose eight per cent, it reported a jump of 73.9 per cent in export sales to its affiliates during the quarter. The jump was also backed by the positives impact of rupee’s depreciation against $dollar, the company said in a statement today.

During the first nine months of the calendar year, Nestle India’s net profit increased 5.88 per cent, while income from sales grew 10.73 per cent during the nine-month period. Globally, Nestle had reported just four per cent rise in sales in the first nine months.

The depreciation & amortisation costs during the July-September quarter have increased over the same period last year due to expansion in production capacities over the last year, amortisation of capitalised borrowing costs, and exchange differences, partially offset by lower depreciation of certain lines that had lower run-time, Nestle India said in a statement.

The company’s finance costs have increased during the quarter under review as against the corresponding quarter previous fiscal year, as the costs in 2012 were favourably impacted by a one-off reversal of exchange differences amounting to Rs 17.86 crore, Nestle added.

Nestle’s tax expense has also increased mainly due to the increase in income-tax surcharge from 5 per cent to 10 per cent effective April 1, 2013, it said.

“I am satisfied that we have maintained double digit growth in the current business environment. We will continue to focus on reinforcing the fundamentals of our growth drivers, further improve operational efficiencies, and keep rationalising our product categories. I am confident of our strategy to deliver long term sustainable profitable growth, despite the short term challenges,” said Etienne Benet, managing director of Nestle India.

The company did not take any additional loan from its parent Nestle SA during the quarter, under the external commercial borrowing (ECB) route. AT the end of the July-September quarter, total amount of ECB outstanding stood at $192 million. Its annualised cost over the loan period since inception, including interest and unrealised exchange differences, is 20.3 per cent.

Nestle India’s foreign currency earnings during the first nine months of the current year increased by more than 64 per cent to $67.4 million.

Shares of Nestle closed at Rs 5,595, up 0.02 per cent, on the Bombay Stock Exchange (BSE), on Wednesday.