Although net sales are up, profit is down by 8.6%.
FMCG major Nestle India today reported a decline of 8.66% in its standalone net profit to Rs 167.31 crore for the fourth quarter ended December 2016, hit by higher tax expense and demonetisation that impacted its domestic sales.
The company, which follows January-December financial year, had posted a net profit of Rs 183.19 crore during the October-December quarter last fiscal. However, net sales of the company during the quarter under review were up 16.17% to Rs 2,261.28 crore as against Rs 1,946.44 crore in the corresponding quarter last fiscal, Nestle said in a BSE filing.
During the quarter, domestic sales moved up 16.89% to Rs 2,093.98 crore as against Rs 1,791.33 crore in the corresponding period a year earlier.
"Net sales for the quarter increased by 16.2% on a base impacted by Maggi noodles issue. Net domestic sales increased by 16.9% and export sales increased by 7.9%. Net domestic sales for the quarter have been impacted by the withdrawal of high denomination currency notes in circulation," the company said.
Sales contribution from export was also up 7.85% to Rs 167.30 crore as against Rs 155.11 crore. Nestle's total expenses in Q4/2016 rose 15.99% to Rs 1,927.16 crore as against Rs 1,661.45 crore a year ago. The company said its tax expense during October-December period was 35.94% higher at Rs 112.70 crore as against Rs 82.90 in the corresponding year-ago period.
For the year 2016, Nestle's net profit was up 64.49% to Rs 926.54 crore as against Rs 563.27 crore in 2015. Nestle's net sales for the year were also up 12.75% to Rs 9,159.28 crore as against Rs 8,123.27 crore a year ago. In 2016, Nestle's tax expenses doubled at Rs 515.00 crore from Rs 250.36 in 2015.
"Tax expenses has increased by 105.7% largely due to rebuild of the Maggi noodles business, lower contribution of profits from tax holidays and higher permanent differences in the current year," the company said.
Nestle India Chairman and Managing Director Suresh Narayanan said: "The year saw Nestle India's single minded commitment to build back MAGGI Noodles. We are proud of the fact that our team, our partners, our stakeholders came together with determination, dignity and purpose to this cause."
He further said: "We are now back to market leadership in the noodles category with close to 60% market share." In a separate filing, Nestle said its board in a meeting held today "has recommended final dividend for the year 2016 of Rs 23.00 per equity shares of Rs 10 each".
Shares of Nestle India today settled at Rs 6,173.60 on BSE, down 0.58% from the previous close.
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