Colgate-Palmolive's Q1'18 net profit increases 8 % YoY, ad spends reduce by 12.25 cr

Reported Net Sales of Rs. 1109.9 crore, a decrease of 3% over Q1 of the previous year

e4m by exchange4media Staff
Published: Aug 4, 2017 4:37 PM  | 2 min read

Colgate-Palmolive registered their first quarter earnings for the financial year 2017-2018. Due to destocking in the trade channel ahead of the implementation of GST the company reported a drop of 3 per cent in their net sales year on year registering sales of Rs 1109.9 crore as compared to the same period last year. Volume declined 5% during the quarter.

Reported Net profit after tax for the quarter was Rs. 136.4 crore, an increase of 8% vs Q1 of the current financial year. In both the Toothpaste and Toothbrush categories, with volume market shares at 54.3% and 45.0%respectively in Q1 2017-18 the company seems to have been keeping a stronghold in the segment.

Issam Bachaalani, Managing Director at Colgate-Palmolive (India), said, “In the run up to the implementation of GST, we did expect many challenges including an impact on trade pipeline inventory. Colgate has been long preparing for this and in anticipation took necessary steps to minimise business disruption. We are pleased to inform that the required changeover in our systems and processes has been smoothly accomplished. Despite the transition challenges leading to softness in sales, we are pleased to report an 8% increase in profits, margin expansion of 50 bps and EBITDA by 150 bps. GST has enabled us to pass on the benefits to our consumers leading to a reduction in MRPs by 8 to 9% for our key categories of Toothpastes and Toothbrushes .We continue to focus on our priorities of strengthening the core of our business and driving competitive and profitable growth while staying committed to our values and sustainability initiatives.”

The FMCG brand has spent lesser this quarter in its advertising expenses. Last year in the same period, Colgate-Palmolive had spent 155.6 crore as compared to 143.35 crore this year.

Comparing revenue, net sales and profits of Q1 2016 to Q1 2017:

The net sales in Q1 2016 was reported at 1141.5 crore which was higher than this year’s figures however, the net profit was lower in Q1 last year at 125.7 crore as compared to this year’s 136.4 crore. There has been a marginal rise in current taxes from the previous quarter, Colgate-Palmolive paid Rs 59.1 crore in current taxes this year as compared to Rs 57.7 crore last year.

At the 76th Annual General Meeting of Colgate-Palmolive held in Mumbai yesterday, Vinod Nambiar, Chairman, Colgate-Palmolive, applauded the inclusion of GST by the government saying, “The Goods & Services Tax (GST), the indirect-tax reform in India, is a bold step in the right direction in the longer term view. As always, Colgate has complied with the laws of the land and has implemented the transition to GST in an orderly manner.”

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