Godrej Consumer Products Q4 net profit slips 75% to Rs 230 cr on COVID impact; sales down over 12% to Rs 2,132 cr

New Delhi: FMCG major Godrej Consumer Products Ltd (GCPL) on Wednesday reported an over 75 percent drop in its consolidated net profit at Rs 229.90 crore in the fourth quarter ended March 2020, hit by disruptions in sales amid the COVID-19 outbreak.

The company had posted a net profit of Rs 935.24 crore in the January-March quarter a year ago, GCPL said in a BSE filing.

Its net sales were down 12.22 percent to Rs 2,132.69 crore during the quarter under review as against Rs 2,429.68 crore in the corresponding period of the last fiscal.

GCPL's total expenses were at Rs 1,791.93 crore as against Rs 1,974.73 crore, down 9.25 percent.

Representational image. Reuters

Commenting on the results, GCPL Executive Chairperson Nisaba Godrej said: “This quarter was an unprecedented period due to the spread of the COVID-19 pandemic across the globe, impacting all the geographies of our operations.”

GCPL's India revenue rose 17.85 percent to Rs 1,113.94 crore during the January-March period from Rs 1,356.09 crore in the corresponding quarter a year ago.

“The spread of the virus and the eventual lockdown in many geographies of our operations resulted in virtually no sales in the later part of March 2020, significantly impacting our sales performance in the quarter. This resulted in a weak performance in our India business, although we have continued to gain market shares across categories," said Nisaba.

According to the company, its India business sales declined 18 percent year-on-year, led by 15 percent year-on-year decline in volume.

However, its revenue from Indonesian market moved up 8.94 percent to Rs 449.36 crore as compared to Rs 412.47 crore in the year-ago period.

“In our international businesses, Indonesia continued its strong growth momentum with mid-single digit profitable constant currency sales growth in spite of the COVID-19 crisis, driven by a consistent performance across categories and several go-to-market initiatives,” she said.

Revenue from Africa (including Strength of Nature) market is down 17.55 at Rs 484.03 crore as against Rs 587.09 crore a year ago.

"In GAUM (Godrej Africa, USA, Middle East), we witnessed a weak sales performance amidst disruptions caused by COVID-19 in many of our countries of operations,” Nisaba added.

While revenue from other markets was marginally down at Rs 135.90 crore as against Rs 136.74 crore in January-March of FY 2018-19.

According to the company, in view of lockdown in the country, operations in many of our locations (manufacturing, warehouses, offices, etc) are scaled down or shut down from second half of March 2020.

“Going forward, we are ramping up our supply chain operations and distribution, in line with the prescribed safety measures and easing of lockdowns in various countries. Since the situation is very dynamic, our teams are continuing to manage our business prudently, while assessing various scenarios for business recovery,” she said.

“We will continue to focus on driving our market share and launch relevant innovations to enhance our competitiveness.”

GCPL's profit before tax for the January-March quarter was 337.39 crore as against Rs 500.57 crore in the corresponding quarter a year earlier.

"During the year to date, there has been sale of certain brands within the group’s entities that shall derive benefits of future tax deductions for the group. Consequently, a deferred tax asset amounting to 113.82 crore has been recognised in the consolidated financial results,” it said

For the fiscal year 2019-20, GCPL’s net profit was Rs 1,496.58 crore, down 36.08 percent. It was Rs 2,341.53 crore in the previous year.

Its net sales in the fiscal stood at Rs 9,826.51 crore, down 3.86 percent. It was Rs 10,221.07 crore in 2018-19.

Shares of Godrej Consumer Products Ltd on Wednesday settled at Rs 534.55 apiece on the BSE, up 3.24 percent from their previous close.