Colgate Palmolive Pakistan Limited (COLG) posted a profit of Rs 800.65 million, which was slightly down by 1.95% from Rs816 million recorded in the same period last year.
Net turnover of the Company grew by 10.54% to R s8.48 billion from R s7.67 billion mainly on account of price adjustments made to off-set the impact of increase in cost of production. The cost of sales of the company increased to 17.13% from last year costs.
Gross profit came down to Rs 2.54 billion down by 2.28% from last year. Despite the increase in selling prices, the gross profit margin of the Company dropped by 393 bps over the corresponding period last year as the Company did not pass on the full impact of devaluation of PKR and increase in the commodity prices due to competitive dynamics of the industry.
The Company rationalized its spending on media and promotion resulting in decrease of 2.83% in the selling and distribution cost. Administrative expenses of the Company grew by 14.81% to Rs 124 million mainly due to increase in employee related cost and depreciation expense.
Earnings per share of the company were stated at Rs 13.91 down from Rs 14.19 in the corresponding year.
Personal care continues to deliver steady growth resulting in share gain for bar soap business. Due to pressure on margins, the Company took selective price increases on its brands to partially neutralize the impact of increased costs and devaluation.
Tax avoidance by unorganized sector in detergent powder and dishwashing bar market is helping the regional players to gain momentum. Due to these non-filers in the industry, the organized sector does not have a level playing field.
COLG’s script at the PSX was closed at Rs 2352 on Tuesday.
Outlook
The PKR has continued its slide against US Dollar and has depreciated by more than 6% in the current month. The company expects further devaluation of the rupee. The international economic outlook also looks uncertain and it is expected that the prices of key commodities may increase further
Colgate Palmolive is a household name and market leader for many segments within the FMCG sector which include oral care, personal care, surface care and fabric care. Some of its most popular brands are Colgate toothpaste, Palmolive line of soap and shampoos, dishwashing bar Lemon Max and washing powder Bonus.
