FMCG major Nestle India Ltd on Thursday reported a 20 per cent decline in its net profit at Rs 386.66 crore for the fourth quarter ended December 31, 2021, as the company faced inflationary headwinds on raw material inputs.
The company, which follows a January-December financial year, had posted a profit of Rs 483.31 crore in the same period a year ago, Nestle India said in a regulatory filing.
However, its revenue from operations was up 8.93 per cent to Rs 3,739.32 crore during the period under review, as against Rs 3,432.58 crore in the corresponding period last fiscal, the company said.
Nestle India's total expenses in the October-December quarter, were up 8.23 per cent to Rs 3,022.97 crore, as against Rs 2,793.01 crore of the corresponding period.
Nestle India's domestic sales were up 9.17 per cent to Rs 3,559.78 crore, as against Rs 3,260.70 crore in the October-December period of 2020.
While its exports were down 6.63 per cent to Rs 146.42 crore, as against Rs 156.82 crore of the corresponding quarter.
"Domestic Sales growth is largely driven by volume & mix and is broad-based," said Nestle in an earnings statement adding exports were lower mainly due to lower coffee exports and change in product mix.
For the year 2021, Nestle India's net profit was up 3 per cent to Rs 2,144.86 crore, as against Rs 2,082.43 crore a year ago.
Its revenue from operations increased to Rs 14,709.41 crore in 2021, from Rs 13,350.03 crore in 2020.
Commenting on the annual performance, Nestl India Chairman and Managing Director Suresh Narayanan said: "2021 was a very challenging year."
Nestl India witnessed "broad-based, double-digit, volume and mix led growth" despite a highly volatile economic environment, he added.
Like other FMCG makers, Nestle India also faced inflationary headwinds on raw material inputs in 2021.
"We continue to witness high inflation in our key raw and packaging materials, where many are at 10-year highs. However, we remain confident of our ability and competencies and will continue to make all efforts towards cost optimisation and seeking systematic efficiencies to mitigate the impact," it said.
In 2021, Nestle witnessed a continuance of strong growth momentum for its Maggi Noodles and its other power brands such as KITKAT and MUNCH registered "stellar growth" throughout the year.
Instant coffee "NESCAF Classic continued to deliver double-digit growth," added Narayanan.
E-commerce as a channel showed "strong acceleration" in 2021, on the back of convenience and pandemic-driven consumer behaviour, and was fully leveraged by Nestl India through meaningful shopper insights and data analytics, it added.
During the year, Nestle witnessed a "resurgence" and good revenue growth in organised trade despite the second wave, while OOH (Out of Home) channel was impacted,
While sharing a "short to medium-term" outlook on commodities, Nestle India, in its earnings statement said prices for key categories like edible oils, coffee, wheat, fuel "remains firm to bullish" while costs of packaging materials continue to increase amid supply constraints, rising fuel and transportation costs.
"Input prices are expected to be on bullish trend both globally and to some extent locally. Fresh milk prices are expected to remain firm with continued increase in demand and rise in feed costs to farmers," said Nestle India adding "In an environment of raw and packaging material inflation, we continue to keenly look for opportunities for cost optimization and efficiencies".
Meanwhile, in a separate filing, Nestle India said its board in a meeting held on Thursday recommended a final dividend of Rs 65 per equity share of Rs 10 each for the year 2021.
Shares of Nestle India Ltd settled at Rs 18,090 on BSE, down 0.85 per cent from its previous close.
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First Published: Feb 17 2022 | 12:48 PM IST