BackColgate-Palmolive profit drops 27.16% in June quarter
Net profit dropped to `134.91 crore for the quarter ended 30 June, missing analysts' expectations
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Mumbai: Colgate-Palmolive (India) Ltd, the maker of personal-care products, reported a 27.16% decline in net profit from the year-ago period to ₹ 134.91 crore for the quarter ended 30 June, missing analysts’ expectations.
The drop in net profit was because of a one-time gain it had in the same quarter of 2013 from the sale of its subsidiary Global Shared Services Organization to Colgate Global Business Services Pvt. Ltd, a 100% subsidiary of Colgate-Palmolive Co. Excluding the one-time gain, net profit in April-June rose 4%.
Revenue increased by 9.87% to ₹ 963.35 crore, but was below Street estimates. In the same period a year-ago the company’s revenue was ₹ 876.81 crore.
A Bloomberg poll of 28 analysts had estimated net profit of ₹ 139.8 crore and net sales of ₹ 967.1 crore.
The company recorded its lowest volume growth in at least five years during the first quarter of fiscal 2015, at 5%. “The overall slowdown in the economy has impacted the oral care major," said Gautam Duggad, analyst, Motilal Oswal Financial Services Ltd.
Yet, the company increased its market share by 110 basis points to 57% in the first six months of the calendar year, over the year-ago period, indicating an overall weakness in the category. One basis point is one-hundredth of a percentage point.
The brands Colgate Dental Cream, Active Salt, Max Fresh and Colgate Total, along with the recently launched Visible White, have contributed to the growth in market share, the company said.
The company also strengthened its leadership position in the toothbrush category by registering a volume market share of 42.6% for the first half of the calendar year, an increase of 140 basis points over the same period the previous year. The company posted significant gross margin expansion by 130 basis points on cost cuts and price increases,.
During the quarter, the company launched a new toothpaste, Colgate Maximum Cavity Protection plus Sugar Acid Neutralizer with a technology to fight sugar acids, a cause of cavities. Colgate also introduced a beauty-oral care treatment, Colgate Visible White, a teeth whitening treatment.
Colgate-Palmolive’s stock closed at ₹ 1,625.00, down by 2.15%, while the BSE’s benchmark Sensex index closed at 26,104.86 points, down by 0.64%.
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