Expect net revenue reduction of 50 mn pounds due to GST: RB

British FMCG major RB has said GST implementation in India is expected to result in reduction of its net revenue by 50 million pounds for the ongoing year.
The company, however, said the impact of GST implementation on its profit is expected to be small.
India is among the top five global markets for RB, which sells a host of items under popular brands like Dettol, Harpic, Durex, Colin, Disprin, Air Wick, Cherry Blossom, Lizol, Mortein and Strepsils.
"The underlying performance in India business remains strong and in growth for the half year but has been negatively impacted by demonetisation and, to a greater extent, destocking by our customers in the lead up to GST changes introduced on July 1, 2017," RB said in an earnings communication.

It further said the full year accounting impact of the move to GST is expected to be a reduction of 50 million pounds (in currency terms) in net revenue, which will be adjusted in like-for-like net revenue reporting.
"The ongoing impact on profit is expected to be small," the company said.

In the second quarter ended June, RB said its growth was impacted by India, which witnessed decline "due to some customers delaying orders ahead of the implementation of GST on July 1".
"Volatility has been seen in India, particularly in Q2 as many customers delayed their orders due to the implementation of GST," it said.

In the second quarter, RB's net revenue declined 2 per cent to 2,479 million pounds and 1 per cent in the first half to 5,017 million pounds on like-for-like growth basis
Besides GST implementation in India, RB also cited continuing humidifier sanitiser issue in South Korea and cyber-attack on company database responsible for decline in growth in the second quarter.
Last year, the company's top management had apologised for its Oxy product causing harm to people in South Korea after a government probe suggested a link between lung damage and humidifier disinfectants.
RB also said the global cyber-attack on June 27 also impacted it and impeded its ability to ship and invoice orders in the days leading up to the half year.