The Hindu Business Line : Nestle net dips marginally

Despite an increase in overall sales, FMCG firm Nestle India Ltd reported a marginal dip in net profit for the quarter ended June 30, 2006. The company's net profit declined by 2.1 per cent to Rs 81.03 crore, as against Rs 82.77 crore in the same quarter last year.

Net sales during the quarter, however, rose by 10.2 per cent to Rs 681.2 crore as compared with the same period last year.

The company's margins were impacted primarily by steep increase in prices of commodities and growing prices of fuels/energies. The company also said there were higher operating costs associated with upgraded formulations and manufacturing processes of the infant nutrition products to further enhance their quality.

"Staggered increases in selling prices and higher volumes have partially offset the cost increases," the company said in a release.

"I am very pleased with the strong growth of 13.5 per cent in net domestic sales supported by a healthy bottom line in an environment of continuing high input costs. Also of particular satisfaction is the commissioning of the first phase of the Uttaranchal plant in record time, setting a new benchmark," Nestle India's Chairman and Managing Director, Mr Martial Rolland, said.

The company's net domestic sales were Rs 610.3 crore in the quarter ended June 30, 2006 and have increased by 13.5 per cent. Export sales in the quarter, however, decreased by 9.2 per cent compared with the same period of 2005 mainly due to lower sales of beverages to Russia and Japan.

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