The Hindu Business Line : Gillette India Q1 net drops 64 pc

Gillette India Ltd, a unit of the US-based Gillette Co that was purchased by Procter & Gamble Co, recorded a 64.71 per cent fall in its net profit at Rs 37.95 crore for the first quarter ended March 31, 2006, compared with Rs 107.55 crore in the same period last year.

The company attributed the fall in net profit to the acquisition by P&G, which had affected the company's retailing network across the country.

However, "as the new distribution structure is up and running, the sales in April are back to normal levels," the company release said.

Restructuring expenses

During the quarter, the company incurred exceptional business restructuring expenses of Rs 12.29 crore.

This, the company said, had resulted in a net loss of Rs 13.81 crore.

Gillette India said it has filed a petition before the Rajasthan High Court for approval of a scheme of arrangement with its shareholders, to write off Rs 85 crore out of the total restructuring cost, against the Amalgamation Reserve forming part of the Capital Reserves of the company.

"On receipt of the approval to the scheme by the appropriate authorities, the same will be dealt with in accordance with the Order of the Court," a company statement said.

The company said the savings and benefits resulting from the restructure, namely the move to a new organisation structure, a new sales and distribution structure and other consequential changes, which involve considerable one-time costs, "are expected to build long-term shareholder value".