The Hindu Business Line : Nestle numbers improve on cost, wastage reduction

New Delhi, March 4 Nestle India Ltd has reported a nearly 50 per cent growth in net profits at Rs 93.61 crore for the fourth quarter ended December 31, 2007.

Net sales of the Indian arm of the Swiss food major, grew 21.64 per cent to Rs 895.6 crore during the quarter compared to the corresponding period the previous year. While domestic sales grew 21.56 per cent during the same period, exports accounting for a little more than 10 per cent of total net sales during the quarter, were up 22.32 per cent.

“While during the past three years we have delivered double-digit profitable growth in 10 quarters, and in the last year over 20 per cent growth in each quarter, we have at the same time improved very markedly our use of natural resources as well as reduced drastically waste and emissions over the past decade,” said Mr Martial Rolland, Chairman and MD, Nestle India, in a statement.

“Scale efficiencies, cost reduction initiatives as well as the ongoing strategic transformation process allowed the business to more than offset higher raw materials costs which continue to remain at record high levels and pose an ongoing challenge,” said a company statement.

Consumption of raw and packing materials was up 25 per cent during the quarter compared to the corresponding quarter the previous year, and up 31.11 per cent for the year ended Dec 31, 2007, compared to the previous year.

For the year 2007

Net profits for the year ended December 31, 2006 grew 31.3 per cent to Rs 413.81 crore. Nestle said a provision of Rs 10.1 crore was made in the last quarter of 2006 (due to a change in procedure by the concerned external authority) which otherwise would have been made in first quarter of 2007. Excluding the impact of this provision the Net Profit for the full year 2007 and fourth quarter grew by 24.1 per cent and 29 per cent respectively.

Net sales increased by 24.44 per cent during the year to Rs 3,504.35 crore. While domestic sales grew by a little more than 25 per cent, exports grew at about 18 per cent during the year. Export realisations were negatively impacted by the appreciation of the rupee, said the company.

Nestle’s Board of Directors’ have recommended a final dividend of Rs 2.50 per equity share (nominal value Rs 10 per equity share. Two interim dividends of Rs 6.50 and Rs 24.00 per equity share were also paid in March 2007 and December 2007 respectively. Shares of the company closed at Rs 143, up 21.6 per cent from the previous day’s close on BSE.